Area demand for new homes rises in first quarter of 2012
By Rebecca Rose
Killeen Daily Herald
On a warm Tuesday in Harker Heights, construction workers at the Springs at the Escarpment erect the skeletal frame of a new home on Mescalero Trail, a street that's so new it doesn't appear on Google maps yet.
This homebuilding scene has been repeated a lot since the beginning of the year. Builders are seeing more growth in the area residential construction market.
In March 2011, Killeen granted 153 new homebuilding permits, with a steady drop in subsequent months that ended with 55 permits in December. In contrast, Killeen granted 265 permits for single-family homes in the first quarter of 2012.
"We have seen an uptick, and it's been pretty good so far," said Tim Farek, co-owner of Cameo Homes. "We're very encouraged by that. There are some good signs in the market right now."
In 2011, Killeen approved eight new subdivision developments, totaling more than 1,000 new lots.
The homebuilding market often has been tied to redeployed troops seeking to settle down, but area builders report a relatively new twist in the demographics.
"Traditionally, that's always been the case," said Farek. "But here recently, we're starting to see a new mix of buyers from the universities and the hospitals."
More and more builders have homebuyers who work for Texas A&M University-Central Texas, Seton Medical Center Harker Heights, Central Texas College, Metroplex Hospital and even Scott & White Hospital in Temple.
"The expansion of the medical system into Killeen has helped us see an increase," said Farek.
At Bella Charca on the outskirts of Nolanville, developers are courting medical professionals, rather than just highlighting the development's proximity to Fort Hood. The website touts the subdivision's closeness to the new Seton hospital: "Located nearby, this new facility will bring quality health care options to Bella Charca residents ... just a few minutes from home."
Killeen's south side
Once sparsely dotted by wandering steer, the land along Chaparral Road in South Killeen, near the 2-year-old police headquarters, has seen decades-old ranches replaced by large housing developments in recent years.
"We have several areas that are strong right now," said Ray Shanaa, executive director of planning and development services for Killeen. "A lot are on the south side of town."
Farek said one indicator of the area's residential popularity is the strong interest shown by out-of-town builders. "They're reaching into this market," he said, adding that many of the new homes are priced in the $350,000 range or higher. "It's an interesting phenomenon we've just started to see recently."
Builders, such as Austin-based Style Craft, are building in Killeen for the first time. "They cater to the same niche as (local builders) CenTex Homes or D.R. Horton," said Farek. "And they see this as a more vibrant market than even the Austin metro area, so they've ramped up their business here."
But some local builders are wary of their new competitors. Harker Heights builder Jeff Lackmeyer of Lackmeyer Homes said out-of-town builders often employ workers from their own region, shutting out a large portion of the local workforce.
The rising demand for new homes has increased jobs in Texas. The construction sector grew 0.8 percent in March, adding 4,500 jobs from January to February, reported the Texas Workforce Commission.
But Lackmeyer said the statewide job totals don't tell the entire story. "Who's getting those jobs? (Those outside companies) don't hire locals," he said. "They steal jobs, in my opinion. That's a very controversial statement, but it's true."
More than 8,100 construction jobs have been added since February 2011, reported the state employment agency.
According to the agency, in 2011, construction accounted for 5,371 jobs in the Killeen-Fort Hood-Temple Metropolitan Statistical Area, down from 5,760 jobs in 2010.
Another area that continues to experience strong new housing is along Clear Creek, south of Metroplex Hospital. "The southwest side of town, closer to the airport, is very popular," said Farek. "There's some pretty good building going on over there because of the access to Fort Hood, and good price points. They're not too high right now."
Beyond Killeen, Harker Heights is strong competition for homebuyers. In March, the city issued 11 permits for residential homes, up from nine in the same month a year ago.
While January was slow for Lackmeyer, he said interest skyrocketed last month. "In the first week of March, I was getting calls every day about building houses," he said.
Lackmeyer, who offers homes in the $200,000 to $250,000 range, said a coveted location is along Stillhouse Hollow Lake. His homes near the water start around $375,000.
Farek said housing developments off Farm-to-Market 2410 also are popular spots, offering oversized lots with more land, such as Springs at the Escarpment in Harker Heights.
With an entrance on FM 2410 and Catskill Terrace, Springs at the Escarpment has 30 acres of green oak and junipers trees and walking trails situated just north of Stillhouse lake.
Killeen-based Cameo Homes and Symphony Homes and Copperas Cove-based Dustin Dewald Builders and Nieman Homes are among the builders in the development, which boasts 115 lots priced between $40,000 and $115,000. More than 75 percent of those lots are sold or under construction.
"These are all half-acre lots or more," said Farek. "They have bigger yards and offer more upscale housing."
With new home construction once again rising, local builders often contend with the other side of the market: existing homes.
With many local homeowners forced to convert their single-family residences into rental properties for lack of buyers, some people question the push to build.
But Farek said builders are responding to market forces. "If people just wanted to buy the existing homes and didn't want new, we wouldn't see the demand," he said.
"If you cut off the supply, you're not cutting demand, just letting demand go to a different place," said Farek. "If you don't give (builders) a place to build, they'll find a place more receptive."
Despite a high volume of existing houses on the for-sale market, Lackmeyer said new homes are especially popular with second- or third-time buyers who are looking to invest in their "dream homes."
"New homes are just more attractive than older ones," he said. "It's just what buyers want."
As for the future of the local market, builders said they're keeping their eyes on developers, both residential and commercial.
"The signs that we see make us very optimistic," said Farek about growth projects for 2012.
Shanaa said Killeen still has plenty of room for housing expansion. "We have a lot of land that's still vacant," he said. "There's a lot in the south, of course, and on the southwest side. Killeen is growing in those directions."
Contact Rebecca Rose at email@example.com or (254) 501-7548. Follow her on Twitter at KDHBusinessNews.
Killeen subdivisions approved in 2011
Cosper Ridge Phase Two replat (49 lots)
Purser Crossing Phase Two (134 lots)
Cosper Ridge Phase Three (10 lots)
Purser Crossing (20 lots)
Sunflower Phase Six (28 lots)
Goodnight Ranch Addition Phase Ten (343 lots)
The Landing at Clear Creek (202 lots)
Bunny Trail Estates Phase One (237 lots)
Source: City of Killeen