Q&A WITH MARK SPRAGUE
Mark Sprague is a noted and respected expert on the real estate industry and the Austin market, in particular. He is also the Director of Business Development for Mission Mortgage and we are fortunate to have access to his expertise and opinions. Recently, Mark was asked questions regarding trends in the Austin housing market. Here are the questions and his responses.
QUESTION: What’s your take on the housing market for homes in the $1,000,000 to $2,500,000 range?
ANSWER: Demand will come at different levels in different price channels and locations, with $200K to $500K being projected to be the strongest channel over the next few years due to demand and lack of inventory. As with all real estate, however, purchases will be highly location driven. Homes priced from $1 Million to $4 million is still a challenged market with a lot of inventory, particularly west of 360 in Austin. The supply of homes in this price range, when compared to sales data, indicates that there are years of inventory to work through. However this has happened before. Most markets can be healed by job creation, which Austin continues to blessed with.
QUESTION: Which subdivisions are seeing the most new starts?
ANSWER: Based on available data and anecdotal evidence, these subdivisions appear to be experiencing the most new starts. The list is presented in alphabetical order.
Ranch @ Brushy Creek
QUESTION: Which builders are getting the majority of the business?
ANSWER: Total starts have dropped. In the last 12 months, we saw just 5,800+ new home starts in this area and it is projected that this year will show similar results. Over 4,000 of those starts were created by just 10 builders. The remaining 1,800 starts were spread out among all remaining builders in the area. The top 10 builders recently, in terms of starts, are listed below in alphabetical order.
D R Horton
QUESTION: Proportionately, which is increasing its volume more: resales or new construction?
ANSWER: Resales will run about 18,000 to 22,000 this year. Values are up, sales are down a little. Presently resales are attracting a strong audience in the lower values due to foreclosures and short sales. With new home starts projected to be around 5,800 this year, it is clear that resales will represent roughly 3 times the volume of new home construction. Neither market (new or resale) is drastically increasing volume currently.