Where Have All The (Affordable) Houses Gone?

Providence_Plano_under250Finding a new home for under $200K in North Texas was a breeze in the not so distant past. Much has changed between 2013 and 2017.

Metrostudy has recently released their first quarter 2017 report showing what local real estate experts know to be true from day-to-day experience: finding affordable housing is “nearly impossible”.

Paige Shipp, Director of Metrostudy’s Dallas-Ft. Worth region, states, “finished vacant inventory priced below $249,999 are in the shortest supply. Conversely, the months of supply for homes priced above $400,000 grows every quarter. Again, this demonstrates that the strongest demand is for homes below $400,000.”

Metrostudy’s 1Q17 report summarizes this quarter’s dramatic drop in starts below $199,999, which marks the near extinction of that price point for new homes in DFW, citing steep land prices as well as lot development, labor, and material cost increases as the culprits behind soaring prices.

Stage Left Suburbs, Enter Exurbs

In Metrostudy’s 1Q16 Report, Shipp stated, “The only way to provide new homes below $300k will be by increasing home density and decreasing home square footage.” An emotionally charged topic for many municipalities, proposals such as the Plano Tomorrow plan incorporates high-density solutions, but developments in affordable starter home brackets are not materializing. Instead, retail-enriched high and mid-rise rental communities are slated to fill the gap.

While financing remains relatively easy to obtain and rates remain low, first-time home buyers are feeling shut out by consumer competition, appreciating values, and the sheer dearth of available inventory in built-out, established DFW suburbs. Buyers who desire new home ownership must resign themselves to either duke it out for those scarce pre-owned opportunities or commit to longer commuting times.

Consumers who hesitated in 2015 and 2016 to purchase homes on the fringes of Collin, Denton, Dallas, and Tarrant counties will find that their options with tract builders offering inventory in starter-home price points are now extending into emerging markets further from employment centers.

These emerging markets, coined as exurbs, sit generally 50 miles or more away from a city center, and give rise to new micro economies where people will live, work and play. According to the Wall Street Journal, the US exurban population could outstrip the urban center population by 2025.

Prominent tract builders who are on the forefront of exurb community development include DR Horton, LGI, Centex, Beazer, and History Maker Homes. And the hot geographic areas of growth receiving both consumer and builder interest include Grayson, Hunt, Kaufman and Ellis counties to support the eastern expansion, and Parker, Wise and Cooke counties carrying western developments projects.

For a list of both new and upcoming planned home communities in starter price ranges — or existing homes for sale under $250,000, contact Providence Group Realty at 469.645.6363, or request your FREE list online. Our agents are local market experts serving urban to exurban geographies across the Dallas / Fort Worth Metroplex.

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