This week the Commerce Department reported that sales and prices of newly constructed single-family homes fell in August despite historically low mortgage rates. Reason: stagnant job market, lots of inventory, and fewer home builders out there churning dirt. We are at about 1970s home building activity, when interest rates were even higher! Last month new home sales slipped 2.3 percent.
Well, in Texas we are still building. And people are buying! Hillwood just announced breaking ground today on the final phase of Lexington Village in the 2,400 acre Twin Creeks residential community in Allen, Texas. The last phase of the project provides 30 new lots with homes to be built by Sanders and Associates Custom Homes and priced from the $590’s. I was up at Jerry Jones’ Star Creek other day, off Stacy Road, the place is hopping and a gorgeous Darling Home that I admired was sold — $550k ish. Hmm. Must be the sweet spot.
And then, recall this Sale of the Week? Well, it’s sold. Jeff Dworkin of JLD CustomHomes says he cannot build this Prairie style home fast enough in Lakewood. He is churning them out, about to begin construction on another. Little Q&A with Jeff after I went through his amazing 2734 square foot home:
CD: So how long was this home on the market?
JD: Two weeks. I had 2 offers in 3 days.
CD: You are telling me one Realtor offered $15,000 below the list price — wow, why?
JD: They said it’s the norm in the production home community, but it’s not the norm in urban infill areas or tear downs.
CD: Well, they didn’t get it. Honestly, are there any builders left?
JD: There are fewer of us. HBA membership is at about 60% of what it was during the boom years.
CD: Belmont Homes is gone, Liz Newman is in Houston, Gregory & Sons are outa here, right.
JD: Right. Some left for family reasons but it’s just really hard to get financing. Banks want a clear track record and are ultra conservative. They prefer spec homes under $750k.
CD: And there’s a lot of builders cropping up I’ve never heard of! But I’m glad someone’s building! OK, so are building costs lower these days?
JD: Yes, for the most part. The cost of lumber (your number one expense) and concrete are down. Labor prices might actually be up because so many people have left the industry. Dirt’s less, interest rates are low.
CD: So it’s a good time to build?
JD: A great time to build