Inflation Hits San Angelo's Housing Market Hard

SAN ANGELO, TX — As San Angelo emerges from the pandemic shutdown with its economy on fire, the Band-Aid was ripped off the housing shortage identified over two years ago.

“We can’t bring in new jobs or new industries unless we have a place to house the workers,” said San Angelo Home Builders Association Director Kristen Oliver. The cost of lumber has skyrocketed, increasing the price per square foot for new home construction towards $200 per square foot. San Angelo home builder David Currie said the cost per square foot has risen from around $140 per foot to $175-185 per foot over the past few months.

A City of San Angelo housing study noted that the community needs 3,700 new residences within two years, and San Angelo’s real estate brokers and home builders are having trouble meeting the demand.

Builder Wesley Doss laments the hyper-inflation in the price of lumber. “It’s hard to bring a new building to market,” he said. The rising lumber and building construction components have increased the price to build a new home $24,000 on average.

The Covid shutdowns of the sawmills in the northern parts of the U.S. started the trend. With an inexpensive money supply and easy home lending, the demand for homes has not abated. There is little price resistance.

Ryan Newlin, broker for ERA Newlin and Co., said that every home is selling right now. “We need more land to develop,” he said. According to the Texas A&M Real Estate Research Center, in March 2021, the San Angelo Local Market Area (LMA) had only 102 homes for sale with the average time on the market of 0.8 months. Comparatively, San Angelo LMA had over 400 homes on the market with an average time to sell of a little over four months less than four years ago during the summer of 2017. The shortage has driven up the price of a San Angelo home from $180,000 to over $220,000 from the summer of 2017 until March of this year.

The price of lumber isn’t the only thing that is in short supply. Lots to build new homes are selling as quickly. Newlin noted that most new construction homes are sold before the construction is complete.

“Any new home that gets built in San Angelo will sell before it’s completed,” Newlin said.

Oliver said the search for new land on which to build will extend past the city limits and into some of the city’s Extra-Territorial Jurisdiction (ETJ), but doing so costs more money than just the inflated prices for building supplies. Sewer, electrical and water lines have to be extended and doing so isn’t inexpensive.

“We are reaching a point where there are no more available lots,” Oliver said.

Joe Hyde wrote this piece and Manny Diaz produced the video.