2018 Forecast: Healthy Optimism for Texas Home Building

December 1, 2017
Woman leaping across a divide

The year 2017 was a gratifying one—but also challenging for home building and the Texas market. The end of job losses in the oil and gas industry led to a slight renewal of hiring, helping to finally turn a corner in the local economy. On the other hand, the effects of Hurricane Harvey are still playing out on how it will change the dynamics of the market. Still, I'm optimistic that, through a mix of diverse buyers, innovations in homebuilding, and new design trends, the housing market across Texas in the coming year will flourish (Image: FotografieLink via Pixabay).

Evolving, diverse demographics will continue to play a role. According to the Kinder Institute for Urban Research & the Hobby Center for the Study of Texas, Houston is the most diverse metropolitan area in the U.S., and that evolving demographic continues statewide. Builders have a diverse demographic of buyers, who hail from Texas, different parts of the country, and from around the world. Styles and characteristics of new Texas homes reflect those diverse tastes and needs. Baby Boomers are still a big piece of the new home market, and successful builders will be those that offer homes designed to meet the needs of smaller, evolving families. Millennials are starting to influence new home designs, but interestingly, their tastes aren't much different from their parents. They’ve been slow to the market, but once they have children, Millennials want the same big yard and big home that the previous generations bought.

The elephant in the room is still labor and material costs. Most builders will still experience challenges related to labor and material cost pressures. By continually looking for new and innovative contractors, builders will find better and more efficient means of building homes.

Design will drive sales.  Homes are fashion, and just like clothing, home fashion is constantly changing. The trend right now is toward sleeker, brighter designs and clean lines and finishes. Just a few years ago, homebuyers wanted the “old world charm” in their homes. Today it’s more modern and minimalist, not only from the exteriors, but from appliances and a home’s interior.

Trendmaker Homes' Reserve at Clear Lake City, Houston

Trendmaker Homes' Reserve at Clear Lake City, Houston (Photo: Courtesy Trendmaker Homes)

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Social media will continue to play an important role in selling homes, from inspirational photos to influential messaging to helping homeowners make decisions. Don’t discount more traditional avenues like television, either. Buyers want what they see on places like DIY Network and HGTV. No longer are people having to wait or shop or study the latest trend; it’s on TV every night.

As homes sales start to nudge upwards with many builders, the call will be made for a healthy optimism that 2018 will be a good year for builders and homeowners selling their homes, not only across Texas, but across the country.

Will Holder is president of Trendmaker Homes and has worked in the homebuilding and residential land development industry for more than 30 years. Holder is a native Texan with a BA from Texas State University, an MBA from The George Washington University, and is a graduate of the Stanford University Executive Program. Holder is currently serving as an Adjunct Professor for the University of Houston MBA Program and is also on the Advisory Board of both the McCoy School of Business at Texas State University and the Bauer College of Business at the University of Houston.


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