THANK YOU TO OUR 2015 CBC ANNUAL SPONSORS
PLATINUM COMING UP: 2015 Custom Builders Council Chair GOLD
BO BUTLER Butler Brothers Construction
Houston Mid-Year Review
The CBC has some great events in store for the remainder of the summer. First, please join us for a Lender Panel on August 20. Find out how to sail through the approval pro- cess for your next project!
SILVER
Next on the agenda is a Mid-Year Market Review on Sep- tember 17, with Eileen Zachar of ZONDA - Meyers Research LLC. This one promises to be very educational, so don’t miss it! Following is just a little taste of what she has in store.
Despite the headwinds, Houston’s housing market is holding up rela- tively well. Home prices and building permits are up compared to last year, while overall sales activity is down slightly. The two major local stories have been the effect of falling oil prices, and the devastating rainfall and flooding that took place in May. Houston has been quite resilient to lower oil prices and remains the top metro area national- ly for single-family building permit activity and new home sales. The broader macro-economic story is what the effect of rising mortgage rates will have on the housing market going forward. So what should you expect for the remainder of the year?
One of the main reasons Houston has been able to weather the storm so far (no pun intended) is because the local economy is much more diversified now than it was during past oil-related downturns. While energy remains the stalwart, technology and health care are huge growth drivers in the region. Many buyers have also waited on the sidelines for the right opportunity to buy a home and now that economic conditions have stabilized with oil prices settling in and mortgage rates steadily rising, it has created a sense of urgency to get in before it is too late. This may be the last chance to lock in at histori- cally low rates before the Fed raises rates later this year.
The recent storms in the area have made building and selling chal- lenging in the near-term. Some of those immediate consequences are millions of dollars in damages, the inability for builders to break ground or buyers to go out house hunting, and delayed closings since lenders are requiring additional inspections for flood damage. Over 14 inches of rain fell in May, and it will surely have a short-term negative impact on housing. However, building and sales activity is reliant on economic conditions, and while the weather may have a short-term effect, it doesn’t alter the overall trend either way.
Houston still leads the nation by far in single-family building permit activity. As of April, Houston issued over 33% more single-family per- mits than Dallas, the second-biggest market, and has issued 2.3% more than the region had during this same time last year. Slower la- bor market conditions combined with increased building permit ac- tivity over the past year caused the E/P ratio in the region to fall to its lowest level since the recession in 2010. This is a leading indicator that shows demand for housing based on job creation may be waning.
CUSTOM BUILDERS COUNCIL INFO AND SPONSORSHIPS: Contact Donna Buenik (281) 664-1429
dbuenik@ghba.org
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The region has performed well in the early part of the year, especially given all the challenges. However, real estate is more of a lagging indi- cator and a slowdown in sales in prices may not take place until after weaker economic conditions have surfaced. In the near-term, rising rents due to a really tight multi-family market will drive people to- wards homeownership. Steadily rising mortgage rates will also create a sense of urgency and drive demand for housing for the remainder of the summer. The real test will come when the Fed starts to raise rates and mortgage rates move markedly higher. For now, the local housing market still has a tailwind behind it and while performance may slow a bit from last year, it will continue to be a stable market.
CBC MONTHLY LUNCHEON TOPIC: Lender Panel
Thursday, August 20 11:30 a.m. to 1 p.m. at Norris Center 816 Town & Country Blvd #210, 77024 Cost: $35 earlybird; $45 after August 17
What does it take to get financing in today’s market? Have AD&C lending restrictions eased? Hear directly from mortgage brokers, lenders and bankers about how to sail through the
approval process for you next project. Sponsored by:
Tabletops:
CBC CHARITY PROJECT Casa de Esperanza de los Ninos
Saturday, September 19 8:30 a.m. to 12 noon
VOLUNTEERS NEEDED! RSVP to
DBuenik@ghba.org
CBC MONTHLY LUNCHEON Thursday, September 17 11:30 a.m. to 1 p.m. at Norris Center 816 Town & Country Blvd #210, 77024 Cost: $35 earlybird; $45 after Sept. 14
TOPIC: Houston Market Mid Year Review
featuring: Eileen Zachar, ZONDA - Meyers Research LLC Sponsored by:
Tabletops:
AUGUST 2015 | HOUSTON BUILDER | GREATER HOUSTON BUILDERS ASSOCIATION – BUILDING A BETTER FUTURE
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