FEATURE STORY
Houston Has Turned the Corner T
he 850 guests attending GHBA’s January Forecast Luncheon were all ears as Mike Inselmann of
Metrostudy shared a presentation that resonated with potential good news for Houston’s homebuilding industry.
Inselmann’s traditional method of pre- senting through PowerPoint was again on tap, and pens and notepads were brandished throughout the crowd. Initial figures indicate that the national economy is showing signs of a steady, but unexceptional recovery pace, assisted by an increase in new home construction (and all the jobs and materials needed in support of home building).
Inselmann points out that the bad choices in the mortgage industry triggered a housing downturn that pulled almost every sector of the U.S. economy into the abyss in and around 2008. Housing, ironi- cally, is now poised to play a significant role in the recovery of the next few years.
“The end of the recession, expansion of job growth, the welcome end to the elec- tion season, and all the negative rhetoric has improved the spirits of consumers. Spending on consumer goods, autos, and now housing is having a positive effect on the economy.”
Metrostudy’s research has concluded that Houston is at the top of almost every list
Metrostudy's report at January Forecast Luncheon predicts continued upturn
relating to housing and real estate. The figures reflect that the downturn in Texas and Houston was not as drastic as most of the other markets throughout the country. The upturn began sooner and “is likely to be more sustainable due to the inordinate share of job growth being created in Texas and Houston.”
The facts are clear that the Houston economy moved from the recovery phase in November 2011, when the local job market regained all the jobs lost in the recession, and began building an ever larger employment base that has reached roughly 2.8 million workers—twice the job base reported at the end of 1982. He estimates that Houston will show an additional 95,000 jobs since that point in November 2011, once the final 2012 figures are calculated.
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“Jobs are the principal driver of demand for all goods and services; jobs create households and household growth is the demand for additional housing, both for purchase and for rental.”
Inselmann reported that the expansion of the energy sector in the past few years has contributed to the robust job recovery. As a result, new households have been added to absorb the inventory of single family and rental homes in Houston dur- ing the second half of 2012.
“Home prices are rising, apartment rents are the highest in history, and builders of both new single family homes and rental apartments are ramping up construc- tion to try to match this new demand,” Inselmann states. “Consumers of housing in the next six months will come to realize that the window of opportunity to lock in a ‘deal’ on a new place to live has closed.”
There was a surge in construction in the past year that caught the suppliers
12 FEBRUARY 2013 | HOUSTON BUILDER | GREATER HOUSTON BUILDERS ASSOCIATION – BUILDING A BETTER FUTURE
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