The Home Builders Association of Greater Austin 2019 Housing Forecast

Transcription

1 The Home Builders Association of Greater Austin 219 Housing Forecast ( ) 1

2 November 6, 218 Austin, TX College Station, TX San Antonio, TX Naples, FL Charlottesville, VA Salinas, CA Lafayette, LA 2

3 Austin Denver Seattle Active Listings AUSTIN, DENVER & SEATTLE Active Residential Listings Nov. '17 Listings Nov. '18 Listings 2, 18, 16, 15,83 14, 12, 11,193 1, 8, 6, 4, 2, 7,1 7,75 7,53 5,131 Source: MLS Austin Denver Seattle 3

4 AUSTIN, DENVER & SEATTLE Total Residential Sales Sales 1, Nov. '17 Sales Nov. '18 Sales 9, 8, 7, 6, 8,68 6,837 5, 4,73 4, 3,732 3, 2, 1, 2,448 2,442 Source: MLS Austin Denver Seattle AUSTIN, DENVER & SEATTLE Months of Supply Based on Previous Year Sales Months Of Supply Nov. '17 months of supply Equilibrium Nov. '18 months of supply Source: MLS Austin Denver Seattle 4

5 Ann. Price Change 25% 2% 15% 1% 5% % -5% -1% -15% AUSTIN, DENVER & SEATTLE Annual Home Price Change Trend Austin Denver Seattle Ann. Price Change 25% 2% 15% 1% 5% % -5% -1% -15% Source: FHFA Ann. Job Growth Rate 6% 5% 4% 3% 2% 1% % -1% -2% -3% -4% -5% -6% -7% Source: BLS AUSTIN, DENVER & SEATTLE Trend in Percent Annual Job Growth/Loss Austin Denver Seattle Annual Job Growth Nov. 17 to Nov. 18 Austin: 35,2 (3.3%) Denver: 3,8 (2.1%) Seattle: 72,1 (3.5%) Nov-9 Nov-1 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17 Nov-18 5

6 Multiplier of Median Home Price to Median Family Income Major Texas Markets & Selected Tech Centers Median Home Price $1,4, 217 Median Family Income 3Q18 Med Home Price Multiplier Multiplier $1,2, 1 $1,, $8, 6 $6, $4, $2, 2 $ Source: NAR & U.S. Census Austin DFW Houston S. Antonio Nashville Raleigh Denver Portland Seattle San Fran San Jose The Austin Metropolitan Area Trend in Median Home Price & Median Family Income Income/ Home Price Median Home Price Median Family Income $4, $35, $3, 3.5X $318,2 218 $25, $2, $15, $1, 1.9X $73, X $1, X $144, X $161, X $189,4 21 $5, $ $39,4 $43,2 $58,9 $67,3 $73,8 $91,862 Source: NAR & U.S. Census 6

7 THE AUSTIN ECONOMY THE AUSTIN ECONOMY 7

8 Ann. % Change 8% 7% 6% 5% 4% 3% 2% 1% % THE AUSTIN ECONOMY Trend in Annual Job Growth/Loss Job Growth Nov. 17 to Nov. 18 = 35,2 Jobs (3.3%) Nov. 18 Unemployment Rate = 2.7% Unemployment Rate Annual Job Growth/Loss Ann. Job Growth/Loss 5, 4, 3, 2, 1, -1, -2, -3, Source: TWC Annual Job Growth 12, THE AUSTIN ECONOMY Annual Job Growth/Loss by Category Nov-16 Nov-17 Nov-18 11,6 1, 8, 6, 6,1 4, 2, , Mining, Logging, Const Manuf. Trade, Trans., Util. Info. Fin. Activities Source: Texas Workforce Commission 8

9 Annual Job Growth 12, THE AUSTIN ECONOMY Annual Job Growth/Loss by Category Nov-16 Nov-17 Nov-18 1, 8, 6, 4, 4,5 3,4 4,2 2, 2,1 2, -2, Source: Texas Workforce Commission Prof. & Bus. Serv. Edu. & Health Serv. Leis. & Hosp. Oth. Serv. Gov. THE AUSTIN ECONOMY-THE OFFICE MARKET Annual Net Absorption of Office Space Absorption 3,, Last Four Quarters Net Overall Absorption = 524,195 SF Approximately 4 mil. SF under construction 2,5, 2,, 1,5, 1,, 5, -5, -1,, -1,5, Source: Cushman & Wakefield 9

10 Available Space THE AUSTIN ECONOMY-THE OFFICE MARKET Trend in Total Vacant Space & Average Rental Rates Total Vacant Space Average Rents Average Asking Rents 12,, 1,, 8,, 6,, 4,, 2,, Source-Cushman & Wakefield 4Q18 Market Vacancy Rate = 1.6% 4Q18 CBD Vacancy Rate = 7.7% $4 $38 $36 $34 $32 $3 $28 $26 $24 $22 $2 FAANG Stocks Combined Net. Cap.: $2.8 Trillion 12 Mo. Rev: $644 Billion Cash: : $246 Billion Ford & GM Combined Net. Cap.: $19 Billion 12 Mo. Rev: $36 Billion Cash: : $43.5 Billion 1

11 Major Lease Transactions in 218 Facebook: 32, SF Lease (Domain 12) Indeed: 37, SF Lease (Block 71) Amazon: 14, SF Lease (Domain 1) Visa: 135,813 SF Lease (Research Plaza Park II) Major Announcements in 218 July: Selected Austin as home of Futures Command (up to 5 employees) Sept: Announced creation of world class tech facility and innovation lab in East Austin Oct: Moving corporate headquarters to East Austin (12 executives) Nov: Started construction of 42, SF Phase II of Riverside Campus 11

12 Major Announcements in 218 $1 Billion Investment 5, Employees Initially Phase One completion in 36 mos As many as 15, employees 3 million SF of space Our Housing Markets 12

13 MAJOR THEMES IN NEW HOME MARKET IN 218 Entered 218 With Questions About Supply, Not Demand. A Great Start to the Year Strong Spring Market. Things Began To Change Late Summer/Early Fall Rising Prices & Int. Rate Hikes Some Buyers Hit a Wall Continued Delays in Lot Deliveries Pushed Starts The Mid-Term Elections Consumer Confidence Shaken by Economic Volatility These Factors Combined to Slow Market Momentum Oct. & Nov. And Then A Strong December! The Resale Market 13

14 Annual Closings 4, 35, 3, 25, 2, 15, 1, 5, THE AUSTIN RESALE MARKET Annual Closings Trend (SF, TH and Condo) 34,791 Closings Last 12 Mos. (+3.5%) Source: Texas A&M Real Estate Center THE AUSTIN RESALE MARKET Average and Median Price Trend (SF, TH and Condo) $4, $35, $3, November 218 Average Price: $381,919 (+4.4%) November 218 Median Price: $3, (+3.4%) Avg. Annual Sales Price Median Price $4, $35, $3, $25, $25, $2, $2, $15, $15, $1, $1, Source: Texas A&M Real Estate Center 14

15 Sales Price $4, $35, $3, $25, $2, $15, $1, THE AUSTIN RESALE MARKET Months of Supply of Listings & Average Sales Price (SF, TH and Condo) MOS of Listings Has Been <4 MOS for 75 Months Average Sales Price Months of Inventory MOS of Inventory Source: Texas A&M Real Estate Center THE AUSTIN APARTMENT MARKET 15

16 Average Occupancy 1% 98% 96% 94% 92% 9% 88% 86% 84% 82% THE AUSTIN APARTMENT MARKET Occupancy & Rental Rate Trends 4Q18 City-Wide Avg. Rent = $1.45/SF 4Q18 City-Wide Avg. Occ. = 93.% Occupancy Rate Avg. City-Wide Rent Avg. Rent +5% in 1 Years Added +64, Apts. Last 1 Years Average Rent $1.55 $1.45 $1.35 $1.25 $1.15 $1.5 $.95 $.85 8% Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Source: Austin Investor Interests $ NEW CONSTRUCTION

17 7872/East Austin (excluding large condo projects) Last 12 Months Median Sales Price =$489, (<3%) Last 12 Months Average Sales Price =$515,74 (+2) Active Listings (new const.) = 16 (16 in 1/18) Sales Last 12 MOS = 139 (132 in 217) MOS Active Listings = 1.4 mos (1.5 mos 1/18) Source: MLS (Jan. 219) 24% of sales in the last 12 months <1, square feet 7874/Central South (excluding large condo projects) Source: MLS (Jan. 219) Last 12 Months Median Sales Price =$653, (<11%) Last 12 Months Average Sales Price =$839,729 (+5%) Active Listings (new const.) = 49 (65 in 1/18) Sales Last 12 MOS = 13 (138 in 217) MOS Active Listings = 4.5 mos (5.7 mos 1.18) 17

18 Independent 363 Units 1Q19 86% Sold 5 th & West 154 Units Complete +9% Sold 7 Rainey 164 Units 1Q19 75% Sold Austin Proper 98 Units April % Sold THE HIGH-END MARKET 18

19 THE AUSTIN LUXURY MARKET-NEW & RESALE Active Listings, MOS & Sales Last 12 MOS +$75, Jan 19 Overall MOS of Active Listings +$75, = 5.1 MOS (Down from 5.9 MOS in January 218) Active Listings Sales Last 12 Months MOS Active Listings Sales/ Listings 1, MOS Active Listings 25 1, Source: MLS $75K-$1Mil. $1Mil.-$1.5Mil $1.5Mil.-$2Mil $2Mil.-$2.5Mil $2.5Mil.-$3Mil +$3Mil. THE AUSTIN LUXURY MARKET-NEW CONSTRUCTION Active Listings, MOS & Sales Last 12 MOS +$75, Jan. 19 Overall MOS of Active Listings +$75, = 6.4 MOS (Up from 5.7 MOS in January 218) Active Listings Sales Last 12 Months MOS Active Listings Sales/ Listings MOS Active Listings Source: MLS $75K-$1Mil. $1Mil.-$1.5Mil $1.5Mil.-$2Mil $2Mil.-$2.5Mil $2.5Mil.-$3Mil +$3Mil. 19

20 A Forecast for 219 2

21 219 FORECAST: PRIMARY FACTORS TO CONSIDER Economic Data Suggests Continued Strong Demand for Housing in Austin. Good Sales in December & Early January Bode Well for Spring Market. Buyer Confidence More Fragile Than Any Time This Cycle. Higher Interest Rate & Price Increases Combine to Increase Costs. Builder s Challenges to Deliver the Right Product Persist: Land/Lot Issues (location, price, entitlement, utilities) Labor Shortage Persists (who controls labor?) Material Prices Lumber a Bright Spot! Biggest Pubic Builders vs. The Rest of the Pack Resources, Margin Pressure The Home Builders Association of Greater Austin 219 Housing Forecast 21

22 For further information, contact: Eldon Rude, Principal 36 Real Estate Analytics