North Texas homebuilding experts talk about industry challengesNorth Texas homebuilding experts talk about industry challengeshttps://www.recenter.tamu.edu/news/newstalk-texas/?Item=121532016-02-16T06:00:00Z2016-02-16T19:00:00Z

​​​​DALLAS – ​​Although the number of new home starts in Texas continues to rise and mortgage access has improved, builders continue to face challenges, said a panel of building experts at Friday's housing conference at the Federal Reserve Bank of Dallas.

Among those challenges are rising land costs, a lack of skilled workers, and an aging buyer demographic.

Robert Cresswell, owner of Cresswell Builders of Dallas, said land cost has been the biggest factor in driving up new home prices, at least in North Texas.

"I don’t think it’d be the same situation in Midland-Odessa right now, but here in Dallas the land costs just went sky high because of all the growth," he said. "It’s just gone nuts. We’re talking $3 million for 100-ft wide lots.”

The cost of some building materials also continues to go up, especially concrete.

“Every three months we’re getting a $3 increase," Cresswell said. "Before the recession, the price of concrete was right at $108, and then it dropped to $60/yard. Now it’s back up to $103/yard, so we’re almost back to where it was before the Great Recession.

He said the cost of doors and windows goes up about 3 percent every six months, while asphalt (used in roofing) and lumber are stable.

Lack of skilled labor is another issue, Cresswell said. Texas has more than 400,000 construction workers, but the state needs more vocational schools and training so these workers can be replaced as they retire.

David Brown with market research firm Metrostudy said builders are doing a "horrific job" of addressing "active adults" (baby boomers), who account for 20 percent of homebuyers. But Affiliated Bank President Garry Graham said he thinks that problem goes beyond just builders.

"Cities have to adapt to where that demographic is growing," Graham said. "I see the need for garden homes, personally. I could see the need for a certain square footage on a garden home. I think cities are generally wanting less density, and that doesn’t work on garden homes.”

Other notes from the panel discussion:

  • Cresswell said DFW is not seeing a huge impact from low oil prices.
  • Brian Collins with Mortgage Lending said mortgage access has "loosened up a bit" in the last few years.
  • Texas is building more new homes than ever in the $250K–$800K price range, Brown said. Meanwhile, new home starts under $250K were down 17 percent in 2015.
  • Overall, Texas home starts are up 66 percent since 2011, but they increased only 1 percent last year.
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