Metrostudy: ‘We didn’t see the drop off of home starts’ in Houston area during COVID-19

home construction
The Houston regional director of Metrostudy, a residential market research consulting company, discussed home start data during the coronavirus pandemic. (Dourtesy Pexels)

The Houston regional director of Metrostudy, a residential market research consulting company, discussed home start data during the coronavirus pandemic. (Dourtesy Pexels)

In mid-March, Lawrence Dean—the Houston regional director of Metrostudy, a residential market research consulting company—feared the worst for the residential real estate market.

“In the first three to four weeks of the coronavirus pandemic, right after the Houston Rodeo canceled its events, home sales and starts were in free fall,” Dean said. “Everyone was staying home—builders, buyers, developers. There was tremendous concern because nothing like this had ever happened before.”

In a May presentation based on first-quarter data, Metrostudy projected annual home starts in the Greater Houston area would total 24,050—nearly 6,500 fewer starts than in 2019, or a 21.4% year-over-year decline.

But based on preliminary data for the second quarter, Dean said he now predicts 2020 annual home starts to equal 2019 or reflect only a slight year-over-year decrease.

“We didn’t see the drop off of home starts that I thought we would see because of COVID-19,” he said.


Between January-March, there were a total of 8,403 home starts across the Greater Houston area, about a 21% increase compared to January-March of 2019, per Metrostudy data. And between April-June, there were 7,644 new home starts, which represents a 3% increase versus 2019 second-quarter data, Dean said.

Homebuilders experienced record sales in the month of May, he added. June sales also performed well.

However, whether home starts and new home sales will continue this performance throughout 2020 depends on five factors, he said.

  • Interest rates: Interest rates are low and are unlikely to increase in the near future because of the economy, Dean said. This will help homebuying activity.

  • Job losses: The vast majority of job losses in the Greater Houston area—similar to the nation—have occurred mostly in the restaurant industry, retail and health care, Dean said. Of those, more employees in the health care industry make enough income to purchase a new home, so the overall number of people who can buy a new home has not declined too much so far.

  • Oil prices: If the price of oil does not increase, Houston-area energy companies may issue additional layoffs, and fewer individuals and families would be able to afford new homes, he said. This decreased consumer demand would slow sales and home starts.

  • Supply condition: Homebuilders paused on buying new properties for several weeks in March and April, Dean said. So at the end of 2020, the Greater Houston area may not have enough properties to build on for demand, and a slowdown would occur.

  • Coronavirus pandemic: The ambiguity around the virus and its spread is a factor that negatively affects homebuilding and buying, he said. “We truly don’t know what’s happening with COVID-19,” Dean said.

By Jen Para
Jen joined Community Impact Newspaper in fall 2018 as the editor of the Katy edition. She covers education, transportation, local government, business and development in the Katy area.


MOST RECENT

The “Click It or Ticket” enforcement period across Texas roads will start on May 24. (Courtesy Adobe Stock)
TxDOT will launch annual ‘Click It or Ticket’ campaign Monday, May 24

The campaign comes after a 2020 that saw a 16% increase in deaths of unbuckled motorists.

The Katy ISD board of trustees voted unanimously on May 17 to authorize the superintendent and administration to create a KISD virtual high school campus for the 2021-2022 academic school year, if funding is approved by the Texas State Legislature. (Courtesy Pixabay)
Katy ISD looks to move forward with new virtual high school

Plans to create a Katy ISD virtual high school are moving forward after a vote from district leaders on May 17, pending funding from the state.

Public schools cannot require students, teachers, parents and other staff members or visitors to wear masks after June 4, Gov. Greg Abbott declared in an executive order issued May 18. (Courtesy Adobe Stock)
Public schools can't require students, staff to wear masks after June 4, Gov. Abbott says

"Texans, not government, should decide their best health practices, which is why masks will not be mandated by public school districts or government entities," Gov. Greg Abbott said.

George Strait will perform at the Houston Livestock Show and Rodeo's 90th anniversary celebration next year. (Courtesy Pexels)
George Strait to close 2022 Houston Livestock Show and Rodeo with concert March 20

Tickets for George Strait's rodeo performance will go on sale June 24.

Effective June 26, unemployed Texans will no longer be eligible to receive the $300 weekly unemployment supplement from the Federal Pandemic Unemployment Compensation program. (Courtesy Adobe Stock)
Gov. Greg Abbott announces end-date for Texans to receive federal pandemic-related unemployment benefits

Effective June 26, unemployed Texans will no longer be eligible to receive the $300 weekly unemployment supplement from the Federal Pandemic Unemployment Compensation program.

Photo of an H-E-B store
H-E-B makes curbside services free

Previously, curbside shoppers were charged a $4.95 fee on all orders, but moving forward that fee will be waived on purchases of $35 or more. Orders worth less than $35 will have a $2.95 "small basket surcharge" attached.

La Borra Del Café’s menu includes a variety of Mexican pastries as well as frappes, Mexican hot chocolate and coffee. (Courtesy Pexels)
La Borra Del Café coming to Katy's Villagio Town Center

La Borra Del Café, a Mexican coffee chain, is expected to open in Villagio Town Center in late 2021 or early 2022.

Each of the new locations will be available to the public to distribute and receive voter registration forms and applications to vote my mail as well as assisting with other election-related services. (Courtesy Unsplash)
Harris County elections administrator announces 8 new branch office locations

Registering to vote will soon be more convenient for Harris County residents with the opening of eight new branch office locations announced by the Harris County Elections Administrator's Office in a news release May 17.

According to the county, Fort Bend is the No. 1 per capita fully-vaccinated county jurisdiction in the state with 51.54% of residents recorded. (Courtesy UH College of Nursing)
Fort Bend leads Texas in vaccination efforts according to state data, county says

According to the county, Fort Bend is the No. 1 per capita fully-vaccinated county jurisdiction in the state with 51.54% of residents recorded.