Real Estate Developers Take Huge Risks In Houston, Phoenix And Jacksonville
A new study by Storage Cafe analyses residential real estate development between 1980 and 2023. It shows substantial real estate construction in Phoenix, followed by Houston and Las Vegas. Both builders and buyers face climate challenges they could not have foreseen at the start of the period. Searing temperatures plague these metros, and hurricanes have pounded Houston and Jacksonville. Climate migration, often due to anxiety about worsening climate conditions, may start a population outflow in all three, which could cause a sharp drop in home prices. The study was titled “Top Cities For Real Estate Development: Sunbelt Cities Dominate Growth Olympics For Nearly Half A Century.”
According to the research, the single-family home constitution in Phoenix added 215,281 units over the period. The figure was 166,268 for Houston and 163,852 for Jacksonville. Houston is the 5th largest MSA in the country, with just over 7.5 million population. Phoenix ranks 10th with a population of just over five million. Jacksonville ranks 38th with a population of 1.7 million. The authors wrote, “Among the locations that are strongly pushing forward, southern hubs carry the torch in single family home construction, with nearly all of the top 20 performers located in the South.”
100 Degrees F
Just this summer, temperatures in Phoenix topped 100 degrees F for over 100 days in a row. Houston was crippled by Hurricane Beryl which cut electricity to as many as 2 million homes. A recent storm hit Jacksonville hard enough to cause flooding in the St John River Basin. Just north of the area in the Carolinas, the storm dumped as much as 20 inches of rain.
A study by real estate research firm Redfin showed that condo prices have started to fall in several southern markets due to storms and the rising price of home insurance. “Condo inventory is soaring and pending sales are dropping in major Florida and Texas metros like Miami, Jacksonville, Austin and San Antonio, causing prices to decline. Surging HOA fees, high insurance costs and destructive natural disasters are making buyers question the feasibility of owning a condo,” its experts wrote.
Condo Prices
The building boom is over in most of the cities in these regions.
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