Texas new home builders finished 2017 with steady sales in December. Most buyers benefited from lower prices as the pace of home sales improve in three of the top four Texas markets, according to the HomesUSA.com® New Homes Sales Index and other data released today. The Index is a 12-month rolling average of the Days on Market (DOM) for new homes listed in the local Multiple Listing Services (MLSs) for the four largest Texas markets, including Dallas-Ft. Worth, Houston, Austin and San Antonio.
The pace of new home sales in December quickened slightly in Texas overall as the combined DOM fell from 122.13 days in November to 121.72 days in December. Dallas-Ft. Worth, Houston, and San Antonio also saw the sales pace increase slightly last month, but according to the HomesUSA.com Index for December, the sales pace in Austin slowed a bit.,
In Dallas-Fort Worth – now the largest new home market in Texas in terms of number of average monthly sales – the DOM decreased from 121.21 days in November to 120.40 days in December. In Houston, the average for new homes decreased from 133.90 days in November to 133.74 days in December, while in San Antonio, the average DOM decreased from 107.34 days in November to 106.94 days in December. Austin was the one major new homes market in Texas where the DOM increased from 112.28 days in November to 112.65 days in December.
Ben Caballero, owner of HomesUSA.com and the number one real estate agent in the U.S., notes the Texas data is in alignment with the strength of U.S. new home sales nationally in 2017. The Commerce Department’s announcement today on New Home Sales for December reported total new home were up 8.3% nationally for 2017, despite the fact that December new home sales were down 9.3% from November.
“We are coming off one of the best years in recent Texas new home construction history, despite the devastating impact of Hurricane Harvey,” said Caballero. “For builders and buyers, new home sales appear to be starting the year strong as buyers are continuing to benefit from generally lower new home prices.” He added “If the Amazon HQ2 decision goes in favor of either Austin or Dallas, the next decade in Texas home building would be phenomenal.”
New home prices improve – except in Dallas-Ft. Worth
Buyers of new homes saw the overall rolling 12-month average price in Texas drop from $348,807 in November to $347,925 in December. According to the data compiled by HomeUSA.com, new home prices were lower from November to December in Austin, Houston and San Antonio, but were higher in Dallas-Ft. Worth. (See Chart 1)
In Houston, the average new home sales price dropped from $369,908 in November to $358,176 in December. In Austin, the average price dropped from $377,277 in November to $376,770 in December. And in San Antonio, the average price in December dropped from $290,627 to $290,337 in December. But in Dallas-Ft. Worth, the average price increased from $346,389 in November to $346,563 in December.
New Home Sales Up in All Four Major Markets
In all four of the Texas major housing markets, new home sales continue to show record strength. The rolling 12-month average of home sales in these markets increased from 3,480 in November to 3,548 in December. That’s according to data compiled by HomesUSA.com® from local MLS and trade associations, including the Houston Association of REALTORS®, North Texas Real Estate Information Systems, San Antonio Board of REALTORS® and the Austin Board of REALTORS®.
According to HomesUSA.com®, based on a 12-month rolling average, Dallas-Ft. Worth posted sales of 1,322 in December, up from 1,279 in November. Houston posted new homes sales of 1,182 for December, up from 1,178 sales in November. Austin posted sales of 589 for December, up from 571 in November. San Antonio posted an increase in sales with 455 in December, up from 452 in November. (See Chart 2)
Understanding the new “Days on Market” Index
Caballero notes the average Days on Market for New Homes “is about 65 days higher for new homes than for existing or ‘pre-owned’ homes.”
Why? “There’s a huge difference between selling a new home and a pre-owned or existing home,” Caballero explained. “New homes are often listed for sale during the early stages of construction. This early market exposure allows buyers the opportunity to customize the home. Plus, by placing more inventory on the market, as it is being built, expands the inventory of available homes, and that’s especially helpful for buyers and agents in a tight housing market.”
Caballero adds, “There really is no apples-to-apples comparison for the Days on Market for new homes under construction with existing homes.” (See Chart 3)
The HomesUSA.com® New Home Sales Index is a first of its kind index to track new home sales. Created by Caballero, who was named “Most Innovative Real Estate Agent” by real estate news firm Inman News, the index is an analysis by HomesUSA.com of sales of homes listed in the Dallas-Fort Worth, Houston, Austin and San Antonio local Multiple Listing Services (MLS). (See Chart 4)