Steve Brown tells us, via housing analyst Metrostudy, that brand new starter homes, those still smelling of lumber and sawdust, now top $300,000 in sales in DFW. Which means they are almost 50 percent — not quite, but almost — more than an existing home. The median price for an average North Texas home is about $180,000.
Which just may make those pre-owned homes ever more attractive to value-conscious buyers.
“We are at an all-time high for new home prices,” said Paige Shipp, regional director for housing analyst Metrostudy. “Prices continue their upward shift, as builders report the greatest demand, and strongest sales for the first quarter are between $250,000 and $400,000.”
The reason, of course, is the rising costs of labor and goods. Concrete has gone way up, as has lumber and copper.
And $300K is rock bottom. Metrostudy says almost a third of the new houses started so far in 2016 will be priced at more than $400,000. Municipality fees are adding to the cost burdens, charging developers fees that are passed onto the consumer.
“Due to rapidly rising land and development costs, developers argue there is little hope for the revival of the sub-$200,000 new home market,” Shipp said. “An entry level home on a typical 50-foot-by-110-foot lot is no longer feasible.
We know: We look for $200Ks every Tuesday.
Metrostudy says median new home prices in North Texas have increased by almost 60 percent in the last decade.
And as we told you earlier in the week, the price levels where builders are building have gone up, too.
But thankfully, the demand is there: Total home starts rose 22 percent in the first quarter from 2015 levels, Metrostudy reports.
Is this a cause for concern? I am not grabbing my Xanax yet. Couple reasons: Interest rates have stayed low and help buffer the extra cost, which is about $50,000 ($250,000 used to be a good starting point for suburban tract homes or about $100 per square foot for a basic house). Spreading that extra dough out over 30 years really takes away the sting.
Secondly, we have jobs and are not super dependent on a single industry, such as oil.
Third, this is creating jobs for the homebuilders and subs. So yes, the wheels may be spinning upward, but thank God they are still spinning.
