These 3 housing markets—including Austin—just hit ‘significantly oversupplied’ lot inventory
Want more housing market stories from Lance Lambert’s ResiClub in your inbox? During the Pandemic Housing Boom, we saw red-hot housing demand quickly absorb much of the available slack in the housing market. Back in 2021, active housing inventory for sale, unsold completed new builds, and available lot supply all plunged to historic lows. But ever since the…
In the housing market, three key regions, including Austin, have recently been classified as "significantly oversupplied" in terms of lot inventory. This trend emerged after a significant drop in housing demand during the pandemic. Zonda's New Home Lot Supply Index, which measures single-family vacant developed lots and the rate at which they are absorbed via housing starts, has climbed to 85.2, a significant increase from the low of 35.8 during the pandemic peak.
This index reading indicates a greater supply of single-family vacant developed lots, with a lower index value suggesting a tighter market.
Of the 30 major metro areas tracked over the past year, 27 experienced an increase in lot supply. Notable markets like Austin, Atlanta, Denver, Dallas, Los Angeles, Seattle, and Jacksonville saw a significant loosening of lot supply. However, despite this uptick in available lots, half of the major housing markets remain in the "slightly undersupplied" or "significantly undersupplied" category.
The index categorizes lot supply into five groups: significantly oversupplied (score 125 or higher), slightly oversupplied (score 115-125), appropriately supplied (score 85-115), slightly undersupplied (score 75-85), and significantly undersupplied (score 75 or lower). In the past 18 months, only Austin, Atlanta, and Dallas were classified as "appropriately supplied," with no other markets reaching the "slightly oversupplied" or "significantly oversupplied" category.
According to Ali Wolf, chief economist for Zonda and NewHomeSource, "The national lot market has reached an important milestone... For the first time since 2016, the market is considered 'appropriately supplied.'" However, markets like Denver, Austin, and Atlanta have moved into the "significantly oversupplied" range. Builders are currently balancing future demand preparation and avoiding excess supply.
Upcoming lot activity has slowed, but the development pipeline remains active, reflecting a cautious optimism among developers.
Written by urgent.news from Fast Company's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
