LAKEWAY, Texas - A new report shows it's taking a full month longer than last year to build a new house in Central Texas.
"We set our equilibrium point (at) about six months for the idea (of the time) it takes from start to finish. And we're seeing it a month longer than that," said Madison Inselmann of metrostudy Austin, a housing and building analysis company.
But KXAN learned in some cases where building challenges like steep slopes necessitate tall concrete foundations, build times can extend to eight and nine months, as was the case for Lakeway resident Mark Kleinman whose home was completed in the Rough Hollow subdivision last December.
He admitted he has new neighbors undergoing the framing and sheetrock phases of construction who will wait a month longer than that.
"Everybody loves where they are and feel like they're getting a good product, but it's dragging out a little bit," he said.
Metrostudy's report pegged the cause of the slower build times on a variety of ongoing factors including:
- permitting backlogs in certain cities (Austin recently reduced its backlog with the implementation of a new computer system that tracks permit applications more efficiently),
- labor shortages including plumbers, framers and drywallers
- a shrinking supply and choice of vacant developed lots
"We're getting to critical mass (on lot choice)," Daniel Foreman of Austin-based builder Scott Felder Homes who said he is selling three to four new homes a month.
"It's going to be a wall of buyers and not having any home sites to build on," he told KXAN, saying this was predicted two years ago. That's when Austin's annual influx of roughly 17-thousand newcomers really began picking up steam.
Metrostudy's Inselmann said the longer build times are causing a ripple effect on the overall housing market.
"If I'm moving to town and moving my family and I have three months… probably their situation doesn't allow them to wait that long. That's why we see the three-month supply of resale homes and we see apartment occupancy over 98% because in the meantime, what are you going to do?"
Inselmann's quarterly report released July 1 st for the second quarter (2Q) of 2013 found:
- Quarterly Starts: 2,650 (+32% from 2Q-12)
- Quarterly Closings: 2,172 (+33%)
- Homes Under Construction: 2,945 (+46%)
- Homes Finished and Vacant: 1,208
And Inselmann points out if you moved to the area this weekend and wanted to buy right away, the current choice of 1,200 finished new homes is considered slim in a market that's expected to turn 9,000 new homes this year.
He said most new homebuyers are getting better prepared: doing their research and getting pre-qualified before sitting down with a home builder. And he said home builders are focusing more on service, setting expectations accurately.
It was the right strategy that sold Mark Kleinman of Lakeway.
"For us, it was the right place, the right time, we realized we were moving into a hot market even though (the build) was longer than we thought," he said.
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