U.S. Housing Market Conditions, First Quarter 2003: National Data

Lubbock, Texas
The Lubbock metropolitan area’s economy is based on agriculture and manufacturing, and Lubbock is the regional trade center for 26 counties. Texas Tech University (TTU) and Covenant Health System are the largest employers. The unemployment rate for the area as of February 2003 was 3.2 percent compared with 6.6 for the state. Total nonfarm employment for the 12-month period ending in February 2003 was 122,458 jobs, or a decline of 0.3 percent from the previous 12-month period.

TTU’s enrollment for fall 2002 was 27,569 students, and the university has the capacity to house 6,700 students on campus. Students living off campus have several housing options; most prefer student-oriented apartment complexes. Construction of a 240-unit student-oriented apartment complex has begun and should be ready for occupancy by fall 2003.

Adjacent to the TTU campus, the nation’s largest, privately funded redevelopment project has been initiated in the city’s North Overton area. The redevelopment will offer retail space, business offices, and areas for public use along with single- and multifamily housing. The 2000 Census reported a population of 4,725 for North Overton, and the area consisted of 1,049 vacant, 235 owner-occupied, and 1,932 renter-occupied units. Almost all of the housing units are being demolished, and the absorption of North Overton residents into the local market has dramatically lowered the owner and rental vacancy rates. A mixed-use project is in the planning stages, which will consist of 274 luxury apartments and commercial space.

Construction activity in the Lubbock area has increased dramatically over the past 3 years. Since January 2000 permits have been issued for 3,400 single-family homes and 1,800 multifamily units, and almost 35 percent of the permits issued since 1990 have been issued in this 3-year period. Since the beginning of 2000 average single-family permit activity has been 1,040 homes annually, well above the average for the 1990s of 660 homes. There were 327 permits issued in the first 3 months of 2003. At this level of activity, the year-end total could exceed 1,300 homes. Currently, there are an estimated 400 homes under construction. Units built in unincorporated Lubbock County do not require a building permit, and it is estimated that an additional 400 units have been built in the past 3 years. The majority of units built in unincorporated areas are single-family homes, and single-family building activity has increased significantly.

Home sales have been brisk over the past 5 years with average annual sales totaling 2,600. Increased employment opportunities, low interest rates, and increased in-migration are supporting the current strong sales activity. The Real Estate Center at Texas A&M University reports that the average time on the market is 3 months. The Lubbock Board of REALTORS^® (LBR) reports total sales of 2,892 homes and condominiums in 2002 with an average sales price of $107,369. Through March 2003 LBR reports 574 sales at an average price of $110,338.

The rise in multifamily building activity has also been significant. Multifamily permit activity began to increase in 1996 and from 1998 through 2000 an annual average of 160 units were issued permits. Activity totaled 747 units in 2001 and 526 units in 2002. In the first 3 months of 2003, permits were issued for 445 units, including one 208-unit market-rate development in northwest Lubbock. Currently there are an estimated 700 multifamily rental units under construction in the metropolitan area. The Lubbock Apartment Association’s January 2003 Occupancy Survey reported an overall occupancy rate of 94.5 percent: a 20-year high.

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