(Rio Grande Valley, TX – May 21, 2013) The Rio Grande Valley continues to see population growth in the 2.5% range, increasing the demand for housing, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

The Rio Grande Valley MSA registered an annual job gain of 7,300 jobs in the year ending February 2013, a 2.0% rate. The benchmark results show a gain of 8,800 jobs (2.4%) in Year-2012, and 5,700 jobs (1.6%) in 2011. Job growth forecasts project the Rio Grande Valley to see job growth in the 2.3% range for 2013. “The local recovery has struggled to gain momentum in the past year though the revised job numbers show employment growth, namely in the sectors of transportation, and retail,” said Randall Allsup, Metrostudy’s regional director of San Antonio and Rio Grande Valley markets. The Rio Grande Valley unemployment rate as of February 2013 is 10.7%, which is down 0.5% from a year ago.

The annual rate of new home growth in the Rio Grande Valley as determined by Metrostudy’s first quarter survey is 1,773 starts. This annual rate of 1,773 is down 365 units, or 17.1%, from the 1Q12 rate of 2,019. “The expectation is that the decline is temporary as the short and long term prospects for the market are good with job growth forecasts for 2013 in the 2% range, and close proximity to a recovering Mexico,” said Allsup. The Rio Grande Valley had 412 starts in the first quarter, down 19.7% from the fourth quarter of 2012. In the Rio Grande Valley the number of new home closings in the year ending 1Q13 was 1,767 down 386 units, or 17.9%, from the 1Q12 rate of 2,153. There have been 458 closings in the 1st quarter, down 12.8% from 4Q12.

Metrostudy’s 1Q13 survey found the level of new home inventory to be high relative to the number of closings in the same period. There were a total of 1,368 homes in inventory at the end of 1Q13, which represents an 9.3 months of supply based on the annual closings rate. Metrostudy documented 685 homes under construction at the end of the first quarter, a decrease of 54 units when compared to 1Q12. “The months of supply of finished vacant units, is the key indicator of the health of housing inventory. When finished vacant inventory in the Rio Grande Valley market approaches approximately 3.0 months, builders are generally forced to begin to offer some concessions in order to move the inventory of unsold homes,” said Allsup.  The inventory of finished vacant units totaled 667 homes at the end of 1Q13, up 10% compared to the 1Q12 level of 609. Based on the closings rate for the first quarter, the current level of finished vacant inventory represents 4.5 months of supply.

“The Rio Grande Valley continues to see population growth. The increased demand for housing is currently being absorbed by an extremely tight rental market with occupancy levels over 95% and rents that continue to climb. The positive side to this is that climbing rents will help build demand for detached housing which has seen the sales pace in the resale market steady over the past few months and inventory levels are beginning to drop which will contribute to stabilizing home values, especially in more desirable areas,” said Allsup.

For information contact:
randall allsup @ 210.525.9549
email rallsup@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  www.metrostudy.com

About Hanley Wood

Hanley Wood, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

(San Antonio, TX– May 21, 2013) Metrostudy reports the greater San Antonio new home market continues to exhibit strong growth during the first quarter of 2013. “Homebuilders entered 2013 with the strong demand and low inventory levels spurring the need for increased levels of construction.” reported Randall Allsup, Regional Director of Metrostudy’s San Antonio office. The start pace was the highest for a first quarter in five years and up 21% over 2012. “It is likely homebuilders will start over 9,000 homes in 2013 for the first time in five years.  Starts in 2013, however, will still be 50% below the peak activity level in 2006,” said Allsup.  Construction activity is expected to continue to grow over the next few years due to the low supply of new and existing homes within the region as well as strong job and population growth.

The San Antonio region is also experiencing rising home prices due to the stronger sales pace and the low level of new and existing homes for sale. There were just over 1,400 finished vacant homes in the San Antonio area, less than half the inventory just five years ago. Resale inventory is currently at a 5.4-month supply, a level that historically has indicated a sellers-market.   “It’s not just the strong demand and low supply driving up prices; builders are getting hit with increased lot costs, construction costs and labor costs. We expect to see home appreciation of more than 3% this year, with new home prices jumping 10% or more in good locations during 2013,” said Allsup.

The near record low interest rates is driving home affordability and allowing buyers to purchase larger, more expensive homes, and the tightness of the mortgage market making it difficult for first-time homebuyers to qualify, are combining to diver the higher priced market as Metrostudy reports that the new home market priced above $300,000 has seen growth of 44% in the past year. “The good news is that well qualified first-time homebuyers have been able to skip typical first-time product and purchase homes in what have historically been move-up price ranges,” said Allsup. The historically low interest rates are allowing buyers to bypass a normal move-up level and purchase a larger and more expensive home.

The increased starts pace and limited new lot development continues to drive down the lot inventory. Lot supply has fallen to 25-months from a peak of 43-months. The “A” locations currently only have a 12-month supply well below what is considered equilibrium. The top performing developments that account for 71% of the activity within the San Antonio region have only a combined 14-month supply of developed lots. “The extremely tight supply of vacant developed lots, which has led to higher land and lots costs, has spurred increased levels in new development planning, a trend we expect to continue through the remainder of the year,” said Allsup.

For information contact:
randall allsup @ 210.525.9549
email rallsup@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  www.metrostudy.com

About Hanley Wood

Hanley Wood, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

“It was the best of times, it was the worst of times.”  The introductory line to Charles Dickens’ A Tale of Two Cities is one of the most recognized phrases in literature.  It is also an appropriate description of the last business cycle and undoubtedly a great theme to tie into the Phoenix housing market.  There is only one problem here … I’ve never read A Tale of Two Cities so I am at a loss to elaborate much more beyond that famous first line.  While most of my friends read that story for school, my English teacher had us read another Dickens classic: Great Expectations. Read the rest of this entry »

(Nashville, TN – May 20, 2013) With Nashville’s new home starts continuing to increase, builders are focusing on land and vacant developed lot opportunities to keep the momentum going, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

Nashville has seen 35 consecutive months of positive job creation.  The Nashville Metropolitan Statistical Area February unemployment rate of 6.4% has consistently outperformed the National and State average. Williamson County continues to lead the MSA with 5.3% unemployment, but almost all counties have shown employment improvements.

The Nashville area recorded 973 closings in 1Q13; this was down slightly compared to the previous quarter. In 1Q12 the area recorded 845 closings. The trailing 12 months of activity in the area resulted in 4,322 closings in the area through 1Q13; 3,581 homes were closed in the 12 months ending in 1Q12. Nashville recorded 1,089 starts in 1Q13. This was a slight decrease from the previous quarter’s 1,155 starts. The 66 unit decrease in starts from 4Q12 to 1Q13 represented a 6% move downward. The 12 months ending in March 2013 saw 4,763 new home starts; the 12 months ending in March 2012 recorded 3,553 new home starts, a 34% increase year over year.

Demand outpacing supply resulted in inventory reductions across the board. Total inventory is made up of models, units under construction, and finished vacant units. Total Inventory was up from 1Q12 to 1Q13. 432 additional units were added to the under construction category, as builders continue to replenish their inventory. Finished vacant inventory increased by 73 units in the same time period. “Builders continue to successfully sell their existing inventory and new starts. Even model homes are being sold as inventory tightens,” said Jason Brown, Regional Director of Metrostudy’s Nashville Market.  Three years ago, 1Q10, there were 1,302 finished vacant units; representing a supply of 3.8 months. Currently 721 units are in the finished vacant category; a rate of 2.0 months of supply.

The 12 months ending in March 2013 saw 2,607 lots delivered to the market; up 47% from the 12 months ending in March 2012 figure of 1,777. First Quarter lot deliveries of 667 were down slightly compared to the amount delivered last quarter. 4,763 homes were started in the 12 months ending in March 2013. Currently, the inventory level of 13,796 vacant developed lots represents a 22% decrease over the 1Q11 level of 17,728 lots. At current absorption rates there are enough vacant lots on the ground for slightly more than 34 months of supply. This is still above a healthy market supply level of 24 to 30 months, but the story is in the details. “As absorption levels begin to pick up along with economic recovery, the overall supply levels will eventually firm up, but we are already seeing shortages in certain submarkets,” said Brown.

“These factors combined with continued steady employment growth, the area’s lack of new home inventory, for sale listings still showing a tight supply and home values remaining stable, Nashville should expect to see continued upward movement in the new home market through the remainder of 2013,” said Brown.

For information contact:
jason brown @ 615.349.2190
email jbrown@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  www.metrostudy.com

About Hanley Wood

Hanley Wood, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

Yes as they say “Life’s a Beach”, we have all heard it many times before location trumps everything. Well it helps to be located close to some of the world’s best known surfing beaches in Southern California, and to have a cool job where you can take your dog to work, wear flip flops and shorts and blend in with your neighborhood of young techies; This is Silicon Beach where technology firms have found a market that caters to their lifestyle and creative needs in the cities of Culver City, Marina Del Rey, Playa Vista, El Segundo, Santa Monica and Venice California.  This happened first in San Francisco when tech companies migrated to the South of Market Area (SOMA) and virtually changed the landscape with their adaptive reuse of an old industrial zone into one of the most dense tech hubs in the country. The common denominator is adaptive reuse. Read the rest of this entry »

In a discussion last week with a friend who builds hospitals in Florida, she shared a story about a slow permitting process significantly delaying the progress of the latest in a chain of ambulatory health care facilities.  They had three of the four permits required to proceed but the last one was anchoring them at a standstill.  It was quite the relatable story.  Around the country, as local markets begin the early, middle, or even late phases of their recoveries, local permitting processes have returned as a thorn in the construction industry’s side.  Optimistically, I’m going to guess that it’s not a position in which they prefer to be.  State and local governments, funded by tax revenues, usually trail the private sector into a recession and, therefore, find themselves playing catch up coming out of a downturn.  It’s a product of their fiscal obligations. Read the rest of this entry »

Metrostudy Q1 2013 Housing Starts

Top Rankings

• In the first quarter of 2013, total new home starts rose to 59,387 which is a 4% increase over total new home starts in the previous quarter and a 40% increase over quarterly new home starts one year earlier. An 8% improvement in annualized growth from the prior period demonstrates that 2013 is continuing the gains seen over the past year.
• In California we are seeing a strong resurgence with the Northern, Southern and Central markets residing as the top three markets in year-over-year growth and within the top five for annualized growth. While Northern and Central California also appear in the top five markets for total quarterly starts, Southern California is right behind in the sixth position with 2,944 starts.
• Completions for the first quarter predominantly followed the starts trends in market leaders for volume with some minor jockeying among the top six. For both year-over-year and annualized growth, California again topped the list but with the San Diego market, showing 160% and 25% gains respectively, along with Northern California following in second place pointing once more to the improving conditions throughout the state.
• Continuing recovery in markets within the West region is demonstrated by top five market appearances of Phoenix for quarterly starts and annualized starts, Las Vegas for year-over-year growth and Denver for annualized starts. The strong gains in starts for Phoenix cooled from the prior quarter for the first time over the past year, but the market maintained a 31% year-over-year increase.
• The 8% annualized growth when comparing the first quarter of 2013 and fourth quarter of 2012 shows an increase over the 5% annualized growth when comparing quarters from a year prior. The higher growth indicates 2013 is off to a strong start and has the potential to exceed the robust 36% increase in total starts we observed in calendar 2012 compared to the previous year.

One of the points I wanted to get across in this morning’s interview on The Hays Advantage (Bloomberg Radio) was that there is some confusion as to what the government’s latest numbers on housing starts really mean.  According to Commerce, single-family starts fell 2.1%, plus or minus 7.8%, …or plus or minus 4.8%, depending upon which part of the release you believe (the release seems to have an error in it because the numbers are inconsistent between the data table and the summary text – curse you, sequestering!).  Either way, the change in housing starts is not statistically significant.  More to the point, housing permits were up strongly, and I believe that our forecast is still on-track for just under a million starts in 2013, rising to 1.15MM in 2014 (single-family and multifamily combined).

I said in the interview that we are in a multifamily boom right now, but that single-family will remain the larger segment, and will grow faster on a percentage basis after the apartment boom slows.

We continue to forecast that single-family starts will hit 640,000 this year, and rise further to 803,000 in 2014.

Starts are up sharply in Northern California (+134% year on  year), with strong gains in Santa Clara, Contra Costa, and Sacramento, and rebounding in badly beaten-down markets like Las Vegas and northern Atlanta.  Around DC, Loudon County starts rose to 867 in 1Q, from 662 a year ago, and Fairfax County managed to start 386 as well.

I was just in southern California, and I was struck by the enormous strength there, with new releases selling out almost immediately, with waiting lists, and some escalations of $100,000 or more in a year.

I talked about the shortage of “A” lots, mentioning that we will soon be at 12 months (or less) of supply in those prime locations.  As a result, a lot of “A” submarkets are back to PEAK lot prices, or even higher than the recent peak!

This will be a year of cost pressures, but also of higher home prices.  Builder margins will be strong in the near-term, but will fall under pressure when mortgage rates start to rise again.

Listen to the interview HERE

(Atlanta, GA –May 17, 2013) “The job market has gotten a lot better but now we don’t have enough houses to meet buyer demand,”  said Eugene James, Regional Director for Metrostudy, a national housing intelligence and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

According to the Georgia DOL, the Atlanta region created 55,200 net new positions year over year ending March 31, 2013, up 2.4%. Private sector jobs did even better creating 61,300 positions, up 3.1%.

Most job sectors were up, including construction jobs (up 2.8%) and finance jobs (up 1.4%), “This is the first time in years since such a healthy increase has been seen in these sectors and reflects what we all have been experiencing in the housing sector” said James.

In March Atlanta’s unemployment rate was still high, at 7.9% while the March National rate decreased to 7.6% but net employment is up by 128,000 jobs from three years ago and “for those who lost their jobs it should be a bit easier to find a replacement job” said James.

Another pleasant surprise was finding out that the Georgia Department of Labor revised previously release figures upwards by quite a bit (revisions are done at least once each year). For instance December 2012 was changed from 33,200 net new jobs up to 54,600. “Perhaps the healthy job growth has contributed to the strong demand in housing” said James.

According to Metrostudys’ proprietary “boots on the ground” 1Q13 field survey results, new home starts increased 60% annually. “In some cases up to 80% of the homes currently under construction have already been pre-sold,” said James.  First quarter quarterly starts were up by 68% and quarterly closings were up by 41% year over year. “We expect to see strong trends like these for the rest of the year and into next”.

Another reason housing starts are up by so much (positive job growth being a one major reason) is that inventories are at record lows. Finished housing inventory (homes 100% completely built and ready to be moved into) continued to decline by another 30% below last year levels. Only 2,431 houses are in the finished inventory category and are spread out over 22 different counties. “Fifteen years ago finished inventory was more than double where it stands today and the population had 1.3 million fewer people in the region. “No wonder home buyers are having such difficulty trying to find homes that are built and ready to move into,” said James.  Many consumers who sold their existing home and had intentions of purchasing a new home immediately are having to rent for a short period of time while they wait for their new home to be built.

One issue that could cool down the new construction boom is the short supply of finished lots on the ground in the “A” locations. “Sure we have more lots in Atlanta than any other place on Earth, but current demand for housing is very low in these areas which contain more than half of the finished and buildable lots and typically are located in exurban portions on Atlanta. But one day home prices will get so high that the days of “drive until you qualify” (for a mortgage loan) will push demand back into these exurban areas as well,” said James.

For information contact:
eugene james @ 404.370.9001 x 111
email ejames@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  www.metrostudy.com

About Hanley Wood

Hanley Wood, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

(Washington, DC – May 16, 2013) This is according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

The Washington DC economy continues to expand, adding 39,700 jobs from February 2012 to February 2013. Currently, the MSA has 3,033,100 jobs, a slight decline from the fall of 2012. The unemployment rate in the DC area has decreased, currently at 5.2%, still significantly below the national rate of 7.6% and ranked 39th amongst MSAs. Over 1Q13, the I-81 corridor has improved in job growth. “The region as a whole added 2,700 jobs over the year. While automatic federal spending cuts have many businesses in the area feeling cautious, the labor market is holding steady for now,” said Melissa Jonas, regional director of Metrostudy’s Mid-Atlantic Market.

New homebuyer traffic was 10.4% below the level seen in 2012 in the first quarter, while contracts were up by 8%. The activity seen in the past three months was higher, with the conversion rate rising by 19% versus 1Q12 rates. Year-over-year for the quarter, cancellation rates fell by 21% to an average 10% rate, the lowest rate seen since the first quarter of 2005. New housing production increased by 36.7% versus 1Q12, which is the seventh consecutive year-over-year increase. Closings were up by 27.7% versus the same quarter last year, up for the third consecutive quarter. Annual starts were again above annual closings and higher than any time since early 2008. “Key areas, like Loudoun County, are benefiting from this increase in activity while the push into the exurbs has not manifested itself to date,” said Jonas.

Overall new housing inventories now sit at 4,941 units, which represents an 8.0-months’ supply. However, 35% of these new units in inventory are condominiums that are under construction or are sitting finished but vacant, with many of these units contained in just a handful of high-rise properties. Condos currently have 19.5 inventory months available. Removing the condos from the equation and looking only at the single family and townhome units, we find that there is roughly a 6.1-month supply of units.  “Tight new home inventories, combined with tight resale inventories, make for a difficult marketplace for buyers.  It is a great time to be a seller, as long as you have your next home secured,” said Jonas.

Vacant developed lot inventories decreased slightly again as new communities open and lots created are quickly utilized. The market has just fewer than 21,500 VDLs available at the end of 1Q13, a decrease of 563 lots over the prior quarter. Due to the increase in starts, the overall supply of lots in the region dropped to 31.6-months, a marked drop from the nearly 60 months of supply seen several years ago. Lot supplies are much tighter in the core counties where nearly three-quarters of the activity is occurring and the supply averages 12.7 months. By contrast, in several exurban areas, the supply of VDLs exceeds 175 months. “Continued demand in the core counties has made the competition for lots increase along with prices,” said Jonas.

“Looking forward, we expect activity to continue to increase, particularly in the core counties as the resale market draws down inventory. Lot shortages in these areas will likely cause activity to bleed over to the exurbs in late 2013. The result should be continued price escalation in the core and an increase in starts in second tier markets,” said Jonas.

For information contact:
melissa jonas @ 703.244.5229
email melissaj@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  www.metrostudy.com

About Hanley Wood

Hanley Wood, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.