New Kids On The Block
Austin, Dallas, and Charlotte are new to the top 10 highest sales rate list for 2019 due to increases in local sales rates as well as declines in pace for some other markets. On the supply side, Austin, Dallas, and Charlotte issued 7.8, 6.4, and 4.8 permits per every 1,000 resident in 2018, far above the 3.6 average for the country. The nuances of local markets can artificially push the average sales rate higher or lower. For example:
- Dallas’ average sales rate is pulled higher by the affordable product offered by D.R Horton and their family brand, Express Homes. Combined, they represent nine of the ten best-selling communities over the last three months with average sales rates far above average and price far below.
- Higher price points with a lot of local competition are still struggling; communities that are selling below 2.0 sales per month are priced 23% higher than the rest of the market.
The year-to-date sales rate of top markets in California faltered considerably year-over-year, down double-digits in Riverside, Los Angeles, San Jose, and San Francisco. For these markets, communities are usually targeting an average of 3.5 to 4.5 sales each month, but the averages are under 3.0 and some communities are still offering incentives.
In San Jose, for example, 28% of the active communities are selling above 4.5 sales. Unlike Las Vegas and Dallas where there is a clear favorability towards the lowest price, location is a dominant driver for San Jose. The average price of the best-selling communities in San Jose is 7% above the rest of the market, while the average home size is 20% smaller.