Page 10 - Builder Brief February 2024

2024 PRESIDENT
2024 HOUSING PREDICTIONS
We hosted the 2024 Housing Forecast on Friday, January 5th at the JW Marriott and had a record crowd. We were honored to have Dr. Rob Dietz, the Chief Economist for the National Association of Home Builders (NAHB) joinusalongwithBryanGlasshagel,Sr.VPforZonda. MayorRonNirenberg kicked us off with a local update, Dr. Dietz followed the mayor with a lot of solidhousingstatistics. Zondawrappeduptheeventwithinformativegrowth projections for the greater San Antonio area.
Here are a few takeaways:
Dr. Dietz forecasted that higher interest rates are here for a little longer. While the Federal Reserve appears to have taken a break with interest rate hikes, the United States is still facing declining growth. We have all been impacted by the steep cost of insurance and world challenges. At some point in the future, we must resolve the border issues.
He shared the approximate costs (outside of materials) that make up the price of a new residential home. While the costs will vary by region and municipality, the national average is eye opening. As you know, GSABA members have been fighting skyrocketing regulatory costs for several years. NAHB’s research shows that regulatory costs, on average, are $93,870 or 23.8% per new home with an 11% gain since 2016.
Here is a quick breakdown:
≥ Zoning: $6,473
≥ Hard Cost of Compliance: $11,791
≥ Land Dedicated to government or left unbuilt: $10,854
≥ Standards to include Setbacks: $8,992
≥ Fees paid by the Builders after purchasing the lot: $12,184
≥ Changes to building codes over the past 10 years: $24,144
≥ Increase in Architectural design standards: $10,794
≥ OSHA, labor, and federal requirements during construction: $10,794
The good news is that while we are in a period of slowing growth, insufficient resale inventory is supporting the demand for new homes. Potential buyers aresittingonthesidelinewithlowmortgageinterestrates. Thisisonereason that builders tightened their inventory, home start activity slowed across all price segments last year.
The great news is that Bryan Glasshagel with Zonda forecasted that home start activity is projected to change from a 20 percent decline in 2023 to a double digit increase in 2024 by 10 percent or more. He echoed Dr. Dietz’s forecast that higher mortgage rates are here for a bit longer than we would all want them to be.
Bryan also shared that new land positions will be key in the very near future. The vacant developed lot inventory (VDL) oversupply will not last for long. He shared solid information on the 13 local market areas within the
TIM PRUSKI
San Antonio Metropolitan Statistical Area (MSA) and it showed that closings are outpacing starts in 11 out of 13 San Antonio’s housing markets.
Bryan said that in a recent Texas A&M Research Center report, the Multiple Listing Services statistics are showing that prices are down year-over-year, but they are stabilizing.
The overall forecast is that we need to prepare for stronger market conditions. This is good news for our members and community.
We have a lot of great events being hosted at your Association. Join us at the upcoming Membership Mixer that will be held at the new Parrish & Companies Showroom in Bulverde. It will be hosted on Thursday, February 22nd from 4:00pm to 7:00pm in Bulverde. Please check the calendar for key meeting and education dates along with our special events hosted by Professional Women in Building, Sales & Marketing and Young Professional Leadership Councils.
If you would like a copy of the 2024 Housing Forecast Magazine with the full slide deck from each of our Keynote Speakers, you can get it by logging into your membership account with GSABA. If you have never logged in, call our Membership Director Darlene Willis at 210-696-3800 or email her at DWillis@sabuilders.com. There is a lot of great information for GSABA Members only.
Sincerely, Tim Pruski
10 FEBRUARY 2024 | GREATER SAN ANTONIO BUILDERS ASSOCIATION