Housing market outgrows NW Austin's land

Eldon Rude is the director of the Austin market for Metrostudy, which provides housing data and information for 40 markets in the United States. He said much of the Northwest Austin area has been built out and that builders are looking north for development, such as the Cedar Park and Leander areas, where there are good schools, roadway infrastructure, and services such as retail, offices, restaurants and entertainment.

Dallas-based homebuilder D.R. Horton is behind three new housing developments in the Northwest Austin region: Parmer Village, Pecan Park and Colina Vista. Ashton Woods Homes is responsible for the Versante Canyon homes, which include villas and townhomes. David Weekley Homes and Scott Felder Homes are building homes for the Lake Creek Park development.

Choosing Northwest Austin

Northwest Austin resident Tammy Braselton purchased a home for $154,700 in the Anderson Mill Village area in December and moved in the day after Christmas. Braselton works in the information technology field and had commuted 50 minutes each way from Kyle since 2005 to work and her daughter's school. From her new address, she is less than 10 minutes from both. Braselton said she started the home buying process in July and looked at about 50 houses with her real estate agent before deciding on Anderson Mill Village.

"Within 2 1/2 miles of my house, there is the mall, the new H-E-B Plus, movie theaters, any kind of shopping, home improvement stores—everything that you would want. There are restaurants and a park that we can walk to," she said.

Just around the corner from Braselton's home are the Lake Creek Villas, with new homes priced at $220,000–$260,000. Blake Houston, president and CEO of Idea Homes, which is building the site, said the company was expected to break ground and begin sales by the end of January. He said Idea Homes chose Northwest Austin for its new development because it saw a need for new housing. He said there has been no new home construction within a 6-mile radius of Lake Creek Villas. Lake Creek Villas is 4 miles from Apple Inc.'s new Americas Operations Center and is also close to Dell Inc.

"We love the location because of the high-tech corridor in Austin," Houston said.

In addition to Lake Creek Villas, Idea Homes is seeking entitlement for two other developments near Parmer Lane and MoPac, which are slated to be available for move-in in fall 2013, he said.

The new developments are indicative of the residential real estate climate in Austin, with local home starts up 30 percent since 2010–11, according to Metrostudy statistics. Rude said there were 7,981 new single-family home starts for the Austin region and that he expects that number to increase by 10 percent to 20 percent in 2013. Primary threats to that estimate increasing include mortgage standards tightening or unforeseen events that affect consumer confidence such as the current discussion among federal lawmakers on the debt limit, he said.

Nationally, there were about 780,000 housing starts in 2012, a 28 percent increase from 2011, according to the U.S. Census Bureau's Department of Housing and Urban Development statistics. In 2011, there were about 608,800 new housing construction projects.

Data from ABOR's Multiple Listing Service shows that from 2008–12, the number of sales of single-family homes and the median home price have been steadily increasing. (See slideshow for statistics.)

The MLS is used as the primary resource for accurate and comprehensive property listing information for Realtors in the Greater Austin area, according to ABOR's fact sheet. ABOR's MLS includes data for 18 counties: Bastrop, Bell, Blanco, Burnet, Caldwell, Comal, Fayette, Gillespie, Gonzales, Guadalupe, Hays, Lampasas, Lee, Llano, Milam, San Saba, Travis and Williamson.

Pushing growth forward

Coneway attributed several factors to the real estate boom in Austin, including the city hosting Formula One races. She said she has already seen international and U.S. attendees of F1 purchase properties in Austin for leasing opportunities and to enjoy when they come into town to visit. Many international buyers are comparing Austin to a European city, she said.

"They [F1 homebuyers] had no idea Austin was as quaint and as exciting as it is," she said. "I think we are going to see a lot more of that," she said.

Coneway said home prices in Austin have increased while the amount of time they are for sale has decreased. Many homebuyers were previously renting, she said. As the home, apartment and commercial space vacancy rate remains low, property owners can get higher lease rates, Coneway said.

"Austin has become a hot commodity," she said.

Other support for growth in Austin can be attributed to the 35,300 new jobs that were created from November 2011 to November 2012, according to Texas Workforce Commission statistics. On the national level, 1,897,000 new jobs were added during the same time frame, according to the U.S. Bureau of Labor Statistics. Rude said that in addition to job growth and employment, consumer confidence is one of the most important variables in people's decisions to purchase a home. He said homebuyers' confidence has grown as the recovery of the Home Price Index continues to improve. The Home Price Index measures the prices of residential homes.

As available lots in Northwest Austin continue to be built out, Rude said developers will continue to look north for future new development. He said land acquisitions are occurring north of FM 1431 and up to Hwy. 29.

Mark Sprague, state director of information capital for Independence Title Company, said he expects the home values, rent prices and cost of sheetrock, lumber and steel to increase in the next two to three years, and that there is not enough lot supply in the Austin area.

"There is just not enough to keep up with demand," Sprague said.