In my previous blog, I had mentioned how This year is really good years for Texas as well as Frisco tx real estate. The momentum has begun since a year and a half. After a year that was down in 2016 Texas is finally back on its recovery since last year. What are the factors let us have a look?
We have also discussed how multi-family housing, then single family home market is still tight. One of the biggest population segments is in the prime home buying stage of life and millennials to who are in the late 30’s. They are married with children and they are looking for homes in both suburbs as well as urban centers. They are the ones who are driving the home sales.
Older Americans are aging and the over 55 age group are not relocating to homes as per the degree that has been predicted. This means that they are not putting up their homes for sale in Frisco, tx and they also have no incentive to sell or have refinanced their homes. In the past, an average home will be sold every four to seven years and nowadays they are selling from 9 to 12 years for sure. The trend is seeming to contribute to the low number of homes that are adding to the inventory for sale.
The real estate scenario in all of Texas’s major urban areas will be doing well this year in 2018 and Texas is still the best state for home construction. California comes as a distant second and both Dallas, as well as Houston, has built more houses last year than all in all the states. Homebuilding in these cities will be just average for what it will be doing over a long time.
Statewide homebuilding permits are going to be about 9 percent this year. Houston permits will be up nearly 14 percent, but some of that will be Harvey rebuilds. There is two main speed bump mainly on the road to new home construction. First, there is not much of a developed lot inventory. The cost to develop a lot for homebuilding is high. Labor is one of the biggest hurdles. It’s not that there is not much of labor; it’s just that there is not enough labor.
You could get a new stick-built house framed in a week if you had a full crew. Now it can be-be said that the framing crew might be only two or three people, and they could take four weeks to frame the same house. A new home that could be built in four or five months a few years ago now takes about eight or nine to complete.
Some Texas markets were becoming overbuilt. Houston was potentially overbuilt until the hurricane. Harvey has also sent the Houston apartment vacancy rate to zero. Statewide rents will continue to rise. Owners are more likely to offer concessions, like a free month’s rent, rather than lower rent.
Multifamily construction will also likely decrease this year. There is already a drop in building permits. The residential construction leading currently points up, despite multifamily construction holding the total down.
The bottom line is 2018 will be a good year economically, including the housing market. Another 350,000 to 400,000 Texans will be added. Unemployment is expected to remain low. It is a good year not only will the United States to prosper in 2018, so will the whole world.