Page 8 - Builder Brief October 2021 Issue

2021 PRESIDENT
IMPORTANT MARKET INSIGHTS
Industry Growth Constrained by Supply & Labor Shortage
On September 21st, at the Board of Directors meeting, Grant Lopez reported on behalf of the San Antonio Board of Realtors (SABOR). In August 2021, the average price per square foot of homes sold in the greater San Antonio area was $164 per square foot. That is a 21 percent increase in the price per square foot, compared to August 2020. The average price of a home in San Antonio reached a high of $353,662 — a 19 percent increase from the same time in 2020.
The average number of days for a home to be on the market in August was only 24 days (31 days less than last year). The months on market for inventory homes, stands at 1.8 months, and we currently have a six-month supply. Those renting residentially also saw an increase, with an average price of $1,698 per rental unit, recorded in SABOR’s MLS territory for August.
We are in one of the most robust housing markets that we have seen in years, but we are also seeing multi-year lows in new and resale home inventory. These low levels of inventory are unprecedented and just one of the things affecting the new home construction and remodeling market.
The shortage of materials, coupled with the pricing spikes, continue to impact our housing supply. While the Biden Administration announced a plan to strengthen critical supply chains, that were weakened by the pandemic, it will not happen overnight. Material shortages and delivery delays have been conveyed from several of our members and this is affecting not only construction but other industries as well. Christmas may look different this year as retailers are already sharing their supply chain woes.
In late September, the Associated Builders and Contractors quarterly report illustrated that the construction industry is also experiencing a decline in jobs, showing 3,000 jobs lost in the month of August alone. This is a disturbing trend, and the lack of labor will have a significant impact on our housing supply too.
The good news is that the Texas Real Estate Research Center updated its forecast for 2021 and 2022 single-family housing sales. They project that the State of Texas will see a 5.5 percent increase in home sales and the housing market will have strong demand with low inventories along with strong price growth.
Only sales in Houston and San Antonio are expected to exceed the state’s forecast, increasing 7.4 and 6.1 percent, respectively. This is great news for our industry as we wrap up the year and look to 2022.
Mortgage rates continue to be a bright spot. The ten-year U.S. Treasury bond yield decreased to 1.5 percent, down after the pre-pandemic levels of 1.6percentinSeptember. TheFederalHomeLoanMortgageCorporation’s
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30-year fixed-rate moved slightly up to 2.98 percent last month. That is good news for our local economy and our members.
As we look to the future, one trend that came about due to the pandemic is the large number of families and people leaving cities to move to the suburbs or to the country. People want more space but still want to be close to the big city where employers and entertainment can be found. The outlying areas in our 22-county jurisdiction are seeing moderate to strong growth and it is exciting to see these areas develop and grow.
From all reports gathered, the housing shortage will be around for a long time. We all need to prepare for construction times to increase, as new homes are delivered.
Please join us at one of our upcoming events, the calendar can be found on page 6 of this issue of the Builder Brief.
Sincerely,
8 OCTOBER 2021 | GREATER SAN ANTONIO BUILDERS ASSOCIATION