There was an important article in today’s Austin American-Statesman:
The developer featured in the article is Taylor Morrison Communities, who paid cash for 440 acres — 1,200 lots — in the Crystal Falls area in Leander. The sale closed on June 30. Clearly, this is a vote of confidence in the future of growth in the Austin area from this builder/developer, but I want to put it into a somewhat larger perspective.
I have written over the past several months about this subject (search Building Permit at www.BillMorrisRealtor.com if you’re interested). I also commented just a couple of weeks ago about the contrast between Austin and reported National market date and about builders’ concern here about not having enough lots to support forecasted growth (search New Home Sales). For today’s discussion, I have assembled these graphs showing annual permitting activity in the Austin MSA since 1980, and monthly activity since 2005:
If you have followed the real estate business in Austin and Central Texas, it is not surprising that the most prominent feature in both graphs is the magnitude of the unprecedented boom we saw in 2005 and 2006. Note, however, that even though the Austin area is recognized as one of the healthiest real estate markets in the United States — maybe the healthiest — you have to go back to 1995 to find annual permitting volume lower than 2009. Austin rode the dot-com boom in the late 1990s, suffered through the dot-com bust, 9/11, and the MCI/Enron scandals, then prospered in the years leading up to the current housing crisis.
The total number of permits issued in January through May 2010 is 11% ahead of the same period last year, but 24% lower than the same time in 2008, a few months into the downturn.
With that as background, think again about the 1,200 lots that Taylor Morrison just bought here. That number represents 41% of ALL the building permits issued so far this year, and almost two times the average monthly permitting pace since June 2007!
Again, this was a cash purchase of 440 acres in just one subdivision, a huge commitment to building in Crystal Falls. It represents a very important vote of confidence in future demand for new homes in our area.