People are moving to Bell County faster than builders can keep up. The demand for housing has created a seller’s market that experts believe will linger for quite some time.
Chris Lockett, president of the Temple-Belton Board of Realtors, said prices have started to rise as the availability of single family homes has dwindled. While the area has generally been considered more affordable than other areas of the state, Lockett said prices will continue rising demand grows.
“It’s a seller’s market. Inventory has still been low. We have a lot of people coming in from out of the area,” Lockett said. “I certainly think the area can support the growth. Unfortunately, I don’t think homes are being built fast enough.”
Home building in Temple has increased steadily since 2011. The city issued 802 single-family housing permits in 2018, setting a record for a second-consecutive year.
Assistant City Manager Erin Smith said housing starts have increased 40 percent since 2014.
“It is exciting to see the level of investment that both developers and homeowners are making and that they are choosing Temple as their home,” Smith said. “We want this level of growth to continue in Temple and we will continue to study trends to ensure proper infrastructure is being put in place to facilitate this level of development.”
The city began intently focusing on infrastructure needs in 2012 when it began its 10-year, $60 million Transportation Capital Improvement Plan to build new roads and update existing infrastructure. That plan has since ballooned to a $146 million investment as the city responds to growth.
Belton is also seeing growth trends. After a slight dip activity from 2013 to 2015, the county seat has seen home starts rise in each of the past two years. Belton issued 127 single-family building permits in 2017 and 147 last year.
Cities on the western side of the county saw similar growth. According to FME News Service, Killeen issued 697 last year, up from 611 in 2017. Harker Heights nearly tripled its home starts, issuing 163 permits last year compared to 63 the year prior.
As of November, the median price for a home in Bell County was $167,400, according to the Texas Board of Realtors. Prices in Killeen were lowest at $131,000. Salado was at the other end of the spectrum at $274,000 and Temple was in the middle at $167,000.
By comparison, the median price for a home in the Austin-Round Rock area was $309,000. Lockett said the discrepancy in price has led home owners to relocate up Interstate 35.
“It’s more affordable. The price per square foot is a lot less than the Austin market. We’re even seeing people from the Austin area move this way and become long-term commuters,” Lockett said. “The cost of living is certainly cheaper and they can get more for their money.”
If trends continue, however, that affordability may not last.
“I would say that affordability is going to be a concern. With the lack of inventory … your first-time home buyers don’t have the money to put down or the income,” Lockett said. “At this time, a good chunk of this area is still affordable, but you hear from economists that there are going to be some affordability issues, and there already are in some areas.”
As builders struggle to keep up with demand, Lockett said access to materials and contractors has become an issue. He said costs have increased as much as 20 percent in some instances.
“I’m personally building a home, and my contractor is telling me that there’s a labor shortage and the cost of materials has gone up tremendously,” Lockett said. “That’s going to be a factor. A lot of our local builders use the same contractors, so if everybody is trying to build at once, there’s not enough contractors to go around.”
At the end of the third quarter, the local housing inventory was about 3.4 months. A balanced market is considered to be 6-6.5 months of inventory.
While Lockett expects the local market to remain strong for the immediate future, he said an adequate supply to meet the current demand would give the market stability.
“If you can keep things in the middle ground where you have a balance of people buying and selling, there are no major spikes in the market and it stays consistent,” Lockett said.