By JAMES BELL
As locations across the U.S. deal with a shortage of available housing, Hays and Ellis County have not been immune to the growing problem.
With housing a critical part of the local economy, Grow Hays Executive Director Doug Williams on Wednesday released a report on the housing market as it stands now, how we got here and how it may be best addressed moving into the future.
“This is the first time we have done this, but we believe housing is such an integral part of economic development and growth that we thought we would start an annual report as to what the situation is,” Williams said.
Through the report, Williams explains why housing is such a critical part of the economic health of the area.
“I get asked sometimes by people, ‘Why are you so concerned about housing? Why aren’t you out recruiting new businesses and manufacturers and retails and restaurants and that type of thing?’ The reality is, we are,” he said.
Williams said housing is a baseline for that recruitment, noting in the report the base of economic needs is housing.
“If you don’t have adequate housing your ability to recruit a business is negligible because they can’t find workforce,” Williams said. “Housing and workforce tie directly together. We have got to resolve that issue before we resolve any others.”
Last week, he noted in Ellis County there were only 31 homes for sale, with only 15 of those below $250,000, 13 above $375,000, and — in what he calls the sweet spot for housing prices, $175,000 to $225,000 — only three homes were available.
And the year-built average of those three houses was 1971, Williams said.
“So somebody moving to town, looking to relocate here, they just don’t have much selection,” Williams said. “That presents some real serious barriers for us to do some other things.”
That lack of affordable housing might be a reason why potential businesses pass over Hays for another location.
“If a major employer is looking at relocating here and they have got to bring in 40-50 to 100 people there isn’t any way we can do that right now,” Williams said. “We have got to fix that problem.”
The lack of available housing in general also drives up prices for the homes that are available, again echoing what is being seen on a national scale.
In Hays, Williams said the average sale price for a single family home in the Hays market went from $177,000 to $196,000 — about an 11 percent increase — in the last year alone, primarily due to the limited supply.
“When supply goes down and demand goes up, prices go up,” Williams said.
With the decreasing supply, he said another key measure of the health of the housing market is the months supply of inventory available.
Ideally, a six-month supply will allow for an ideal balance between buyers and sellers, Williams said.
One year ago, a five-month supply was available, but by year-end that had dropped to only two months.
“And I would say we are a little bit lower than that right now,” Williams said. “Two or less is way too low. We need to fix that.”
Williams said he believes the key driver for the low number of houses on the market is ongoing low interest rates, which is also believed to be a key reason for the national shortage.
“These are historically low interest rates,” Williams said. “They make homes much more affordable and so traditional renters are able to afford a new home, so that’s a big driver.”
He said overall population growth in Ellis County could be affecting home availability as well.
“The two combined create a situation where we just don’t have enough housing,” Williams said.
Watch the housing report below or on youtube at https://www.youtube.com/watch?v=sBXb5-apxKU.