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MEETING THE DEMAND: Bussell Building, led by Tyler, left, and Kenny Bussell, is developing six subdivisions, including a new one on 200 acres in Battlefield.
SBJ photo by Jessica Rosa
MEETING THE DEMAND: Bussell Building, led by Tyler, left, and Kenny Bussell, is developing six subdivisions, including a new one on 200 acres in Battlefield.

Developers respond to housing shortages

New home construction grows as real estate market inventory dwindles

Posted online

The real estate market in Springfield and surrounding areas is booming. The problem is, there aren’t enough houses to keep up with the demand.

“Last year, we closed over a billion dollars, and that’s the first time ever,” said Jeff Parker, managing real estate broker at Murney Associates, Realtors, one of Springfield’s largest real estate firms. “We’re right on track to close a billion this year.”

But Parker is quick to note housing inventories are shrinking well below the industry’s comfort level.

Population increases in the city are adding to the shortage. According to census data, the populations of Springfield and surrounding communities are on the rise. Estimates put Springfield’s population at 168,113 people, a 5.6% increase since the 2010 census.

Area developers are trying to meet the demand to provide more homes for area growth. According to research by Springfield Business Journal, the 10 largest subdivisions in the Springfield area have had a 106% increase in available lots in the past year. Homebuilders are seizing the opportunity to grow their businesses.

Options shortage
Parker said the outlook for Springfield’s housing market is bright, except for one detail.

“Interest rates are low and prices are higher, but not crazy high,” he said. “The only problem is we have a shortage of inventory. What we consider a healthy real estate market is four to five months’ worth of inventory.”

He said that in 2018 there was about three months’ worth of home inventory, but this year, the market is down to only two months.

According to data from Realtor.com, there were 1,703 active listings in Springfield in October, a 14% decrease compared with last year. Nationwide, listings have only decreased 7%.

Median list prices in Springfield have jumped 18% since the previous year to $225,000, according to Realtor.com, while the U.S. median list price has only risen 4%, now up to $312,000.

Parker said average home prices in Greene, Christian and Webster counties are up 7% year-over-year to a little over $190,000.

“This time of year, you would think it would slow down a little bit,” Parker said. “But I think with the good economy, the good interest rates, the buyers are still out there.”

Building to demand
In response, developers have tried to do what they can to increase the housing stock.

Bussell Building Inc. is developing six new subdivisions, totaling 1,246 lots available.

Millstone Crossing, located in west Springfield, is one of Bussell’s latest. A Greene County recorder’s office filling shows a deed of trust in early November between Central Bank of the Ozarks and Bussell Building with a note amount of $5 million.

Bussell said other ongoing subdivisions include Eagle Ridge Estates in Nixa; Forest Heights in Nixa; Green Ridge Estates in Battlefield; another 200 acres in Battlefield that is in the preliminary stages; and Auburn Hills in Republic.

“Southwest Springfield has been a hot area for us,” said Tyler Bussell, vice president of Bussell Building, also identifying Nixa and other areas as hot spots in this busy year. “In the last year or so, we’ve just tried to sweep up land and get (subdivisions) in every corner of the surrounding areas. We’re not really seeing one spot being slower than the other. It’s pretty evenly spread.”

Battlefield also is becoming a popular area for development, Bussell said, adding his unnamed 200-acre development in Battlefield already has led to 50 calls from potential homeowners within months of beginning work.

This year, Bussell Building is projected to build around 150 homes and finalize purchases on about 120-130 of them.

Bussell said 80%-85% of the homes the company sells are built to suit or customs, and single levels go for $180,000-$280,000, while basement homes are priced $280,000-$360,000.

Other new subdivisions with lots available in 2019, according to SBJ list research, include The Lakes at Shuyler Ridge developed by Shuyler Ridge LLC in Republic and Forest Trails near Farm Road 193 and East Cherry Street, developed by Rita Baron.

According to the SBJ research, in 2019, there were 369 available lots in the largest 10 subdivisions in the area, with 4,351 current and future lots planned. That represents an over 100% increase in available lots for new homes, compared with SBJ’s numbers from 2018.

Migration trend
As the housing market rebounds, Springfield-area workforce growth is a key contributor.

Ryan Mooney, senior vice president of economic development at the Springfield Area Chamber of Commerce, said the workforce in the Springfield community is growing about 1% a year the last few years. Mooney said that’s higher than the national average, which is 0.6%.

“That tells us that anytime a worker is added to the workforce, a job is created,” he said. “The companies can’t find enough people. When they are able to find someone that enters the workforce, they are hired right away.”

Mooney said the chamber is looking for ways to improve the workforce growth percentage.

He said communities that are seeing higher economic growth, about 2%-3% each year, have funding for community betterment projects, such as parks or revitalizing downtown areas to make things more attractive for potential workers.

Bussell said he’s seeing that migration trend in the area.

“At the very least, 40% of our sales are for out-of-town buyers,” he said, noting many come from Kansas City and St. Louis and as far away as California and New Jersey.

Comments

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Larry Peterson

While we at Habitat for Humanity of Springfield are excited about the area’s recent development and construction growth, it is important to remember that nearly 1 in 8 households in Missouri spend half, or more, of their income on housing. In the Springfield area, over 10,000 renter households are considered Extremely Low Income – and make < 30% of the Area Median Family Income - there is also a deficit of over 8,000 affordable units available.* The stability that housing should bring continues to remain out of reach for many people.

Since we can’t ‘build our way out of this situation,’ in order to ensure that everyone has a safe and decent place to call home we need to look for ways to identify and improve policies and systems at the local, state and federal levels. Incentives like tax credits or construction/development permit waivers in exchange for mixed income units or reallocating current property taxes (not raising!) towards affordable, and live-able units are just a few examples used in other communities.

The current lack of affordable homes/rental units issue is dangerously close to crisis levels. By focusing on improving housing affordability with attention to policy areas such as increasing supply and preservation of affordable homes, equitably increasing access to credit, optimizing land use for affordable homes (think nuisance properties), and ensuring access to and development of communities of opportunity we can start to improve home affordability in Springfield.

* National Low Income Housing Coalition “GAP Analysis”

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