I have some followup information to this post, in which I linked to a Nancy Sarnoff column about a potential oversupply in the Houston housing market. After getting some feedback on it, I sent email to Sarnoff, Dmitry Messen of the Houston-Galveston Area Council, and Dr. Barton Smith of the University of Houston. Here's what I learned:
- Sarnoff did not have an answer at hand to my question about whether or not household growth was keeping up with the growth in new simgle-family housing starts. She did, however, say that after she wrote the story two months ago about growth in the far-flung exurbs (see here for my blog post on it) that she wants to do a story that investigates that question. I responded that I'd be very eager to read such a piece.
- Messen pointed me to the 2025 H-GAC Regional Growth Forecast, for which there is a large-PDF executive summary here. What I gleaned from that is that their "aggressive scenario" projects approximately 1 million new households in the greater Houston metro area (more on that in a moment) by 2025. You can do the math from there and conclude that in that scenario, we'll be adding 12,500 new households per quarter for the next 20 years, which is a fair amount less than the 14,500 new homes that were built last quarter. That's a big simplification, one which doesn't take into account a whole bunch of things, but I think it provides some context. Long-term, obviously, a new house build rate at that level is too high. Even in the short term, you probably can't have too many months like that, at least not right now. It's my opinion that if we hear the same news about record-breaking numbers of new houses being built over the next couple of quarters, we will see a slowdown in that market shortly thereafter.
- Sarnoff confirmed to me that the new housing growth was for the Consolidated Metropolitan Statistical Area (CMSA), which consists of Brazoria, Galveston, Chambers, Fort Bend, Harris, Liberty, Montgomery and Waller Counties. This is the same area for which H-GAC did its household growth projections.
- A question which I haven't asked anyone yet is how apartment complexes fit into this. There's two being built near where I work - one at Old Spanish Trail near Greenbriar, the other at Kirby and Braeswood - and I know there are many others out there. I don't think they're being counted in the numbers Sarnoff cited on Sunday. How many new apartments are coming online each quarter? What effect will that have on the new house market?
- Via Colorado Luis, there were over 12,000 foreclosed homes on the market in the state of Texas just last month. How many of them are in the Houston CMSA? Foreclosed homes tend to be cheap - what effect might this have on the new house market? And on a side note, how many interest-only mortgages have been written recently in Houston? Is that number increasing? If so, is that a sign that we're running out of new potential house buyers?
That's it for now. More when I get it.Posted by Charles Kuffner on August 10, 2005 to Elsewhere in Houston | TrackBack