August Home Building Statistics Down Nationwide-See How Pearland, TX Fares

At the start of fall, US homebuilders activity has declined -5% from the Summer peak. This may be the lowest level in over 50 years and is even down from what was considered low in 2009. That year, builders began work on a little over half a million homes.  Economists say that over 1 million is necessary for a healthy housing market.

New home construction is a small portion of the overall housing economy, but it represents future growth.  In addition, home building statistics represent jobs created and future property taxes paid..  After previous recessions, housing has accounted for 15% of economic growth in the US.  It now accounts for only 4%.

Recent weather trends such as, hurricanes, flooding, drought & fires do account for some of the dwindling activity.  Most will also agree that the current continuation of a poor economy and job losses has many Americans foregoing homeownership and opting to rent. However, according to experts, the increase in consumers leasing not enough to substantiate such a huge decline in building for both single family homesteads and apartment construction.

Another contributing factor is the appeal of re-sale homes versus new.  Builders are pushing big deals and incentives, especially locally in Pearland communities such as Lakes of Highland Glen, Stonebridge, Shadow Creek Ranch, Southern Trails & Oakbrook Estates, Friendswood communities such as Autumn Lakes and League City subdivisions like Westover Park. Click Here for More Information and to search New Homes by Area.  In fact, the median price of a new home is more than +28% higher than resale nationally.  That is more than twice the markup in a healthy market.  In the City of Pearland that number is +19% for new construction versus re-sale homes that are only 6 years old.

Here are the 2011 Year to Date Statistics for Pearland:

New Construction

S - 229 Properties Found
	SqFt	Beds	FB	HB	List Price	LP/SqFt	Sale Price	SP/SqFt	Adj. Sale Price	Adj. SP/SqFt	SP/LP %	DOM	CDOM	Year Built
Min	1344	2	2	0	147143	59.42	140000	59.07	139200	56.71	70 %	0	0	2005
Avg	2757	3.86	0.43	2.61	231812	84.08	218406	79.22	216220	78.43	95 %	96.48	109.73	2010
Max	4851	6	4	2	426196	140.69	401961	109.45	401961	104.93	103 %	919	1002	2011
Median	2582	4	3	0	221900	83.77	210398	79.88	205000	78.73	96 %	71	74	2011

Re-Sale (2005 or Newer Only)

S - 207 Properties Found
	SqFt	Beds	FB	HB	List Price	LP/SqFt	Sale Price	SP/SqFt	Adj. Sale Price	Adj. SP/SqFt	SP/LP %	DOM	CDOM	Year Built
Min	1230	1	1	0	55000	35.08	53000	33.8	53000	33.8	71 %	0	3	2005
Avg	2777	3.76	0.57	2.45	214620	77.28	207575	74.75	205902	74.15	97 %	95.67	156.81	2006
Max	6188	6	5	2	725000	165.3	690000	157.32	690000	157.32	110 %	571	766	2010
Median	2541.5	4	2	1	189900	75.14	178000	73.01	178000	72.44	97 %	77	107	2006

Source: HAR MLS 1/1/2011-9/20/2011, City of Pearland

Perhaps a light at the end of the tunnel (whenever that may be) is that building permits are up 8% versus a year ago. This shows that builders have the intent to build, but will probably wait until the economy improves.  New construction projects typically begin about 6 months after the permits are pulled.

Most important for local Houston buyers is to do your research and be sure that the price you're paying if you buy new is fair market as this data will affect future trends.  Sellers need to consider new construction trends as well when pricing their homes as it will be a factor when buyers are making their final decisions in the coming months.

See the full article posted 9/20/2011 from the Associated Press.