![]() Help from resales: Like many major new-home markets across the country, the resale market is aiding the strength seen in Houston. Two key factors have contributed to the strength of Houston’s new-home market over the last half of 2020 and thus far in 2021.ġ. Houston’s equally tight current and near future lot inventory would not allow it to surpass DFW’s new-home starts volume. My colleague David Brown recently posed the question of whether Dallas-Fort Worth has the near-term lot supply to remain the highest volume new-home market in the country. ![]() Tight lot inventory conditions are anticipated to get worse before they get better, continuing in Houston over the balance of 2021 and into 2022. Equilibrium in the Houston market is typically 20 to 24 months’ inventory. One related “problem” facing Houston builders is that vacant developed lot inventory is also at a cycle low of 14.1 months’ supply. Even with elevated annual new-home starts, the market’s current new-home inventory levels are at cycle lows. Houston saw 34,484 new-home closings during 2020 as well. This places Houston right in the middle among year-over-year sales growth among the top 20 new-home markets. Zonda’s January 2021 New Home Pending Sales Index reflected Houston’s sales activity increasing by 21.4% versus January 2020. New-home sales (as opposed to starts) in Houston are up year over year as well, although not as aggressively so versus other major markets. This is also the greatest annual new-home starts seen in Houston since 2008, shortly after the 50,000 annual start peak market of 2007. The Houston area saw 36,739 new-home starts in 2020, which represent a 20.3% increase in annual starts versus 2019. 2 volume new-home market in the nation behind our neighbor to the north, Dallas-Fort Worth. But the area’s housing market, especially the new-home market, is one area in which Houston definitely does not have a problem.Īt the conclusion of the challenging year that was 2020, the Houston area remained the No. This hackneyed saying effortlessly rolls off the tongue and has been applied to anything and everything related to Houston: its weather (fair enough), its professional sports teams (again, fair enough), its economy, its local industry. It is now even the chorus of a popular country music song. “Houston, we have a problem.” As a native Houstonian, I cringe each time I hear that famous phrase uttered or referenced by reporters, journalists, or authors.
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