Nonagricultural wage and salary employment in the Southwest region increased by 2.4 percent during the 12 months ending in August 1997. Oklahoma led the region with a 2.9-percent growth rate, followed by Texas at 2.6 percent.
The Southwest region housing market continued to show strong activity in 1997. During the first 9 months of 1997, building permits were issued for 89,781 single-family units, a 5.7-percent drop from the comparable period in 1996. Activity in Texas was down less than 5 percent to 61,912 units.
The boom in multifamily activity that began in 1994 in the region continued in the first 9 months of 1997. All States reported increased building permit activity. Through September 1997 permits were issued for 42,320 units -- a 34-percent increase over 1996 volume for the same period and about equal to the total activity for 1994. In the past 3 years, multifamily permit activity in the Southwest region averaged 44,700 units. At the current pace, 1997 should be the best year of the 1990s. Texas recorded the largest percentage increase of 40 percent, with more than 32,700 units as of the third quarter of 1997.
Houston's nonagricultural employment increased by 2.9 percent for the 12 months ending in August 1997. The continued growth in the petroleum, computer manufacturing, and health industries is fueling a big increase in housing demand. Texas A&M's Real Estate Center Trends reported that home sales in the Houston area for the 12 months ending in June 1997 totalled 37,569, up 4 percent over the prior 12-month period. Single-family building permit activity for the first 9 months of 1997 totalled 16,120 units, an increase of 5 percent over 1996 volume for the same period. The big story is the significant improvement in the rental market and the increase in multifamily housing construction activity. From 1994 through 1996, multifamily permit activity averaged 5,700 units annually, compared with 3,300 units annually from 1990 through 1993. In the first 9 months of 1997, permits were issued for more than 10,700 multifamily units.
In Austin home sales for the 12 months ending in June 1997 were down 7 percent to 11,588. Single-family permits for the first 9 months of 1997 (5,128 units) were down 22 percent from a very high 1996. Multifamily permit activity continued to decline in the Austin-San Marcos area through the third quarter of 1997; through September, permits were issued for 3,039 multifamily units, a drop of 16 percent from the comparable period in 1996.
In San Antonio sales of existing homes for the 12 months ending in June 1997 totalled 8,467, up 2 percent from the previous year. The median sales price was $86,600 as of the second quarter of 1997, up from $84,600 as of the second quarter of 1996.
According to the American Seniors Housing Association's 1997 Construction Survey, Texas led the Nation in the construction of senior housing, including retirement apartments, congregate care units, assisted living, and skilled nursing or specialty care. The survey identified 52 projects with more than 6,100 units.
The number of single-family building permits issued for the Oklahoma City metropolitan area for the first 9 months of 1997 decreased 7 percent from the same period in 1996. Most of the new sales construction was in the $100,000 to $200,000 price range. The National Association of REALTORS® shows Oklahoma City as the most affordable major metropolitan area, with a median single-family home sales price of $80,000 as of the third quarter of 1997.
A 5-year lending and investment strategy created by Fannie Mae and the city of New Orleans plans to help more than 8,000 low- and middle-income families become homeowners. Among those who will benefit are minorities, new immigrants, inner-city residents, and people with special housing needs.
The rental market in Albuquerque continued to be somewhat soft, although conditions are improving. The Albuquerque Apartment Association reported that apartment occupancy in Albuquerque was 91 percent as of the third quarter of 1997. Multifamily housing permits for the first 8 months of 1997 were up 10 percent but are still significantly below the very strong levels of 1994 and 1995.
The first of more than 2,000 new multifamily rental units are beginning lease-up in Oklahoma City. Although initial occupancy was reported as acceptable, it still remains to be seen if a significant number of new high-rent properties can survive in a market that maintains one of the lowest average rental rates in the Nation. Market rents increased less than 2 percent during the past 12 months.
Construction recently began on Tulsa's first downtown residential development in 27 years. A public-private partnership, composed of Lincoln Properties and the Tulsa Development Authority, is building a 156-unit rental complex called Renaissance Uptown. This partnership has also proposed the renovation of a historic building into 31 rental lofts, with construction to begin in January 1998.
Spotlight on Dallas-Fort Worth, Texas
The population of the Dallas-Fort Worth Metro-plex as of July 1996 was 4,575,000, reflecting a very strong 2.3-percent annual rate of growth since 1990. The economy has diversified in the past decade. Major employers include electronics manufacturers (Texas Instruments and National Semiconductor), defense contractors (Lockheed Martin, Raytheon, and Bell-Textron), telecommunications manufacturing and service companies (GTE Telephone Operations, Northern Telecom, DSC Communications, AT&T, Ericsson, SBC Communications, Motorola, and Nokia), computer services (EDS and Perot Systems), energy companies (Exxon, Oryx Energy, Fina, Union Pacific Resources, and Pioneer Natural Resources), transportation providers (American Airlines, Southwest Airlines, Burlington Northern-Santa Fe Railroad, and Union Pacific Railroad), and large retailers (J.C. Penney, Frito-Lay, CompUSA, and Tandy).
Strong employment growth has continued in 1997. For the 12 months ending August 1997, nonagricultural wage and salary employment increased by 3.8 percent (87,500 additional jobs) over the previous 12-month period. Most of the recent job growth has been in the northern suburban areas, such as the Telecom Corridor of Richardson, Legacy Park in Plano, Las Colinas in Irving, and Alliance Airport in Far North Fort Worth.
Job growth from 1993 through the present has meant a significant increase in housing demand and development. A total of 20,079 single-family permits were issued through September 1997, only 0.6 percent below 1996 for the same period. At the current pace, 1997 could meet or exceed the 1996 record of 25,500 units. Texas A&M's Real Estate Center Trends reports that for the 12-month period ending June 30, 1997, 46,500 homes were sold in the Dallas-Fort Worth area. Local Multiple Listing Service statistics show Plano topping the list with a median sales price of $143,200 for the 12-month period ending June 30, 1997, followed by northeast Tarrant County at $115,600, Dallas at $103,900, Arlington at $86,500, and Fort Worth at $68,100.
Multifamily permit activity from 1990 through 1993 averaged 4,000 units annually. Beginning in 1994 and continuing through 1996, apartment construction went into high gear, with multi-family permits averaging approximately 13,250 units annually. The pace of strong growth increased during the first 9 months of 1997, with permits issued for 12,568 units, almost 60 percent above the first 9 months of 1996.
During the early 1990s, apartment development was confined to a few areas, such as Plano, Far North Dallas, Uptown/State Thomas near downtown Dallas, and Las Colinas in Irving. Development is now much more widespread though still primarily centered in the northern suburbs. Lewisville and Far North Fort Worth are attracting a lot of developer interest.
In response to increased demand and market acceptance, additional rental housing is under construction in Dallas and Fort Worth. Downtown housing in Dallas involves conversions of commercial structures, several of which are public/private partnership projects. In Fort Worth most of the development is new construction on the fringes of downtown. Current apartment occupancy rates in the Metroplex are approximately 93 percent.
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