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The homebuilders surveyed in this report account for approximately 81% of new home activity in the Austin market, according to Metrostudy 3Q17 closing data.

Based on those builder reports, we estimate that Austin-area builders achieved a total of 19,996 gross new home sales in 2017. During December, area builders achieved approximately 1,238 gross and 948 net new home sales.

In contrast, the Austin Board of Realtors (ABOR) reported 276,243 pending residential resales during the year. With this in mind, we estimate new home activity currently makes up approximately 7.25 percent of home sales within the Austin market.

It’s helpful to remember that resale homes compete very well for buyers’ hearts and minds. (Metrostudy Members can quickly run a competitive report on our Insight platform that shows both new and resale closing activity within a specific Trade Market Area. Let me know if you need training on how to do this.)

Sales Offices and Onsite Traffic

The model home count among our reporting builders inched up in December. Month Over Month (MOM) model count increased by 4 units to 371.

For the first time since March, builders reported an increase in traffic as compared to 2016. Numbers rose 5% Year Over Year (YOY). The MOM drop was less steep than in 2016. Monthly numbers fell 8% from November to December this year vs. 16% last year. Onsite traffic per sales office dropped again, to 26.2 units, down 9% from November.

Gross and Net Sales

In December, traffic and sales performance varied quite a bit by average base price:

Overall, we saw a dramatic drop in sales from November to December; sales dropped MOM by 20% for both gross and net. Yet YOY figures were strong. Gross sales hit 1,003, up 6% from 2016. Net sales jumped 9% over December 2016 figures.

For 2017 as a whole, builders reported that sales were 10% better than they were in 2016.

The Realtor co-op percentage jumped 20% as compared to 2016, to 85.6%, More Realtor business can likely be attributed to strong spec inventory sales.

New Home Inventory

The number of unsold homes Under Construction was essentially flat MOM, growing by just one home. Nearly 3,000 sticks are in the area thanks to reporting builders.

Yet builders saw a dramatic uptick in the number of unsold Finished Inventory in December. Monthly changes increased by 12% and YOY the number of unsold specs is 57% higher than it was a year ago. We believe that this is the first time we’ve hit more than 1,000 unsold specs in the market (at least since the Great Recession).

We’re mindful that big builders—who tend to build a lot of specs—are dominating the Austin market. The high number of unsold specs is likely not evenly distributed by price, location or builder.

Home Shopper Performance

The Cancellation Rate (Net vs. Gross Sales) remained essentially flat MOM, and below 2016 figures. The 2017 average cancellation rate was 21.2%.

The Capture Rate (Total Traffic/Total Net Sales) in December dropped to its lowest level all year: 7.9%. The average for 2017 was 8.7%.

The December Capture Rate also varied by price point. Our reporting builders whose base prices fell in the Mid-Range generally experienced lower Capture Rates than those in the Value or Luxury range. Value builders had much stronger traffic and sales numbers in December.

 

For more information, please contact:

Vaike O’Grady, Austin Regional Director, 512-827-6344 or vogrady@metrostudy.com.

About Metrostudy Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. We are recognized for our consulting expertise on development, marketing, and economic issues, and we provide research studies evaluating the marketability of residential and commercial real estate projects.

Data compiled by Metrostudy. All data has been reported by the participating members of this survey and can be subject to change.