Lot supply hits 100,000 in D-FW
Dallas Business Journal - by Katherine Cromer Brock Staff writer
In the Dallas-Fort Worth area, there are nearly 100,000 vacant lots ready for homebuilders to begin construction.
But with a declining number of housing starts, a large number of those lots may lie untouched, possibly for years.
More than two dozen North Texas cities have more than a five-year supply of lots — two years is considered ideal for equilibrium in the market.
“The actual number of lots hasn’t changed much over the past two years,” said Ted Wilson, principal with housing consultant Residential Strategies, during a recent briefing on market conditions in Dallas. “But the lot-development pipeline has been greatly reduced. Don’t expect much new development until 2010.”
In the second quarter of 2006, there were 50,928 starts on 95,160 vacant lots, meaning there was a 22.4-month supply of lots. During the same period in 2008, there were 24,951 starts on 97,323 lots, for a 46.8-month supply. There are currently 14,075 lots under development.
In Fort Worth, the supply of vacant lots is at 44.4 months. In Dallas, the supply is 48.3 months.
But in several outlying markets, the supply is much higher. Some areas were hit hard by the subprime mortgage debacle, Wilson said. Others in outlying areas are having problems finding buyers who are willing to pay high gas prices to commute.
Southwest Fort Worth has an 87-month supply. DeSoto has a 122.5-month supply of vacant lots. Trophy Club and Westlake are looking at a 135.4-month supply. West Arlington has a 211.2-month supply. Van Alstyne, north of Dallas, has a 676-month — or 56-year — supply of vacant lots.
There are some areas in the Metroplex that have a sustainable number of lots. West Frisco, for example, has a 28-month supply. Other areas, such as Irving, Rowlett, Murphy, Allen, Cleburne and the Hurst-Euless-Bedford area are at equilibrium.
Three years ago, Rockwall was fourth on the list of the top 10 fastest-growing counties in the United States, according to the U.S. Census Bureau, increasing at about 4,500 people a year.
“Up until about a year ago, we were almost out of new lots,” said Rockwall City Manager Julie Couch. “We now have an inventory.”
In fact, Rockwall has an 89-month supply of lots. There are 1,090 lots on the ground. Annual starts have declined by a quarter to 147. The city used to see 500 to 700 permits a year, Couch said.
Planning director Robert Lacroix said the lot supply is a “healthy inventory for a growing community.”
“It takes a year to 18 months to go out and develop land so you can sell lots,” Lacroix said. “We’re probably in a very good position for people when things start to change and they want to move.”
Rockwall also has nearly 2,000 lots that have preliminary plats. Another 800 are zoned for residential use.
Dick Skorburg, president of The Skorburg Co., is developing the Stone Creek subdivision in Rockwall, which will have 1,700 lots on 800 acres, built in 10 phases, according to Skorburg’s Web site.
“Each submarket needs to be looked at on their own merits because they vary greatly,” he said. “There are quite a few submarkets that are healthy. We’re happy with all of our projects and where we are.”
Builders cutting back
North McKinney has a 60.3-month supply of lots, with 1,060 lots, and an annual start rate of about 211.
In the Tucker Hill masterplanned community, there will be more than 2,000 homes on 800 acres in McKinney, said Brian Sewell, executive vice president of community development for Franklin, Tenn.-based Southern Land Co., the developer of the new subdivision. Currently there are about 20 finished houses and 25 under construction, he said. Ten have been sold. The entire development is expected to be completed in 2015 or 2016, a projection that has shifted in response to recent downturns in housing.
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