Houston Housing Market – Watch Regulations/Legislation to Remain Competitive

Referencing facts from a July 16^th NAHB press release titled Builder Confidence Rises Six Points in July – a couple of items stand out with respect to Houston.  NAHB Chief Economist David Crowe is quoted in the release as saying that “Builders are seeing more motivated buyers coming through their doors as the inventory of existing homes for sale continues to tighten.”  He adds that while this is happening, the homebuilding infrastructure is recovering and some previously skyrocketing building material costs have begun to soften.  For Houston, I don’t think we have seen a softening in materials pricing. In the greater Houston area as compared to some other relatively hot markets, home prices have not risen as dramatically (reminding us of the dreaded “bubble” experienced elsewhere from a few years ago). However, homebuyers will begin to push back as prices continue to increase due to construction costs rising. At some point homebuyers will say “no” in spite of demand and short supply. There are a number of factors affecting home prices and we are fortunate to be one of the most affordable metro markets in the country, but we must keep a close watch on everything from regulations to legislation, to remain competitive.