A few days ago I wrote about the contribution of home builders to the overall supply of homes in the Austin area (see Housing supply in Austin?) Today, I want to add a comparative view of the data I discussed in that post.
The original post mentioned that from 2006 to 2017 the number of single family building permits was down about 20% and Austin metro population was up almost 40%. Obviously, that’s not good news, but consider what it means in absolute terms:
(To calculate how many units were needed in the 5-county metropolitan area during this period, I assumed an average of 2.4 people per household.)
During that time period, there were 315,676 resales of houses, condominiums, and townhouses across the 5-county metro area reported via the Austin-area MLS system. Those transactions included 2 or more sales of some properties — analysis that I have not done. Also, some new Austinites purchased other types of property (mobile and manufactured homes, half-duplexes, etc.) and many others rented single or multi-family residences. That said, there were credible estimates in 2017 that we were 48,000 dwelling units behind the needed supply. Moreover, Austin’s Strategic Housing Blueprint, which was incorporated into the Imagine Austin comprehensive plan last year, calls for the creation of 135,000 new dwelling units over the next ten years — in the City!
That’s an average of 13,500 per year in Austin compared to an annual average of 9,514 permits issued over the past ten years across the entire metro area, and it doesn’t include the additional 4,800 units annually to make up the 48,000 unit existing shortage.
We are far from resolving the supply vs. demand imbalance in our housing market, and even as the market cycle shows some signs of maturity. I’ll have more to say on this as the year goes on.