We’re seeing tons of apartment construction, but what about affordable single-family homes? They’re getting more and more rare inside Dallas, especially if you’re shopping for a new home. According to Steve Brown’s story, the first-time homebuyer price range is thinning out in a big way, and if you want a new home, plan on a long commute.
There are some builders who are still constructing homes in the $175,000 to $200,000 range, but you’ll have to travel all the way to exurbs like Little Elm to find them. Why? It’s because of the price of the dirt itself has gone up, making the cost of the lot a disproportionately high portion of the total cost of the home.
“That’s our No. 1 issue the builders are facing – affordability and how to keep their prices down,” said Ted Wilson with Dallas housing analyst Residential Strategies Inc. “There are still some older building lots around that are priced lower, but those are going away.
“A new house for about $190,00 is pretty much the bottom rung in the market,” Wilson said. “It’s getting very difficult for them to find a home lot priced under $40,000.”
Now, if you’re shopping for a pre-owned home in this price range, you’re going to be looking for good location in an established neighborhoods, proximity to amenities, and better schools. All of that comes at a price, and the competition could mean being ready to bid on a home the same day that you tour.
But considering the demand for single-family homes and how well-positioned some institutional investors are in this market, it’s not surprising to see affordable homes snapped up quickly. Could this be what is keeping first-time homebuyers out of the market?
“For years in Texas, we have had the most affordable housing for a major metro area,” said Dr. James Gaines, chief economist with the Real Estate Center at Texas A&M University. “Affordability and workforce housing are going to be a major issue.
“We are not building enough houses in the $150,000 to $200,000 bracket.”