New Home Sales Will March to New Highs Soon

Posted in National Housing Market | Posted on 04-23-2014 | Written by Jonathan Smoke

The Commerce Department will report the first preliminary read on New Home Sales for March tomorrow.  Economists are expecting an increase in March of just over 2 percent from the 440,000 annualized pace reported initially for February last month.  We often poke fun at the monthly numbers, as the survey methodology behind the metrics often ends up with monthly changes that are not outside the survey confidence interval.  So instead of waiting for the monthly press release, let me go out on a limb and report now that new home sales are indeed marching forward and should be looking more positive on both a month-over-month and year-over-year basis.

Metrostudy collects data on traffic and sales from builders around the country.  The data aren’t as reliable as the full census we do in the field inspecting subdivisions lot by lot or by the lagging data on home closings, but in aggregate the traffic and sales metrics give us visibility into key leading trends.

The most reliable way to compare traffic and sales month to month and year over year is to look at the average traffic and average sales number per community as that helps to control for changes caused by more or fewer communities.  Think of it as “same store sales.”  So if the average traffic and sales numbers go up, builders are seeing better results across their communities.

We are seeing 2014 perform following a classic new home sales pattern.  In such a pattern, sales should grow each month into the spring and summer and then decline in the second half of  the year, reflecting the extreme seasonality of real estate and construction.  I have been saying that each month this year is reflecting improving momentum, just as a classic seasonal pattern would predict.  But when compared to last year, which looked more like the industry was shot out of a cannon in January, sales haven’t been as strong.  The most negative bears said it was more than the weather.  I say it was weather and a very abnormal start to last year.

It’s time for the bears to wake up and realize spring has spring because we  hit a new milestone at the end of March even though the month was still harsh for winter weather.  In looking at our weekly traffic numbers, the most significant story was seen in the final week of March.  The last week of March recorded the best traffic and sales over at least the past four years for the same period.  That was also the first week in 2014 that both the traffic and contract average surpassed the same data points in 2013.


Let me repeat that.  The last week in the first quarter was the best week in four years—the comparison to last year is now positive.

Here are the key points from a monthly perspective to align with what the Commerce Department releases tomorrow.  The traffic average for March was up 8 percent over last year and flat with February.  Average contracts were up 16 percent over February, so the conversion rate is improving.  Average contracts for the entire month were down 7 percent relative to last year, but as indicated above, on a weekly basis the last week in March was better than the last week in March last year.


Last year started with a bang, but had no momentum as we entered spring.  Add in last year’s historically mild winter, the first quarter was simply hard to beat.  Momentum now favors this year winning once we get past March.

Furthermore, the improvements are widespread.  More than half of markets saw improvement in March over February and year over year in traffic. And 60 percent of markets saw sales improving in March over February.

Traffic is up substantially compared to last year in markets like Las Vegas, Washington, DC, and the Inland Empire.  And traffic increased in March more than 50 percent over February in areas of Phoenix, Denver, and Chicago.  Sales improved in March over February by more than 80 percent in areas of Chicago and Salt Lake City, while year over year sales are already 65 percent better or more in areas of Chicago, Maryland, Ventura, CA, and Chicago.

Are we expecting crazy increases?  No.  There is simply not enough finished or under construction inventory to enable more than 20 percent increases in sales over last year’s rates.  But demand is solid as evidenced by traffic data and consumer survey data on plans to purchase in the year ahead.  Meanwhile supplies are limited in both new construction and existing homes.  If not in the month of March due to the fickle nature of the new home sales survey methodology, we should clearly see sales improving in April and as the year progresses on both a month over month and year over year basis.

When Less Is Better

Posted in National Housing Market | Posted on 04-22-2014 | Written by Jonathan Smoke

We can almost hit replay on our March analysis, but it is worth repeating with updated data so the point we originally made can really sink in: the existing home market is indeed getting stronger but you need to get used to stronger equating to fewer but better sales.

Economists were expecting another slight decline in existing home sales in March from 4.60 million originally reported in February to an annualized rate of 4.55 million in March, and results came in better than expected.  The report this morning from the National Association of Realtors (NAR) set the initial March reading at 4.59 million, a decline of 0.2 percent from the unrevised February rate of 4.60 million.  However, the volume is not the key number; the most important metrics reveal the composition.


A stronger resale market is one where we see increasing levels of good ole fashioned, non-distressed sales consummated between normal consumers amidst price appreciation and limited supply.  We want to see fewer foreclosures, fewer REO sales, and fewer investors.  And indeed we are seeing less of what we don’t want to see and more of what we do want to see—it’s just netting out that the totals are slightly lower.  And that’s fine because the current rate of single family existing home sales is still almost 15 percent above the 45-year monthly annualized rate.

Leveraging the deed level data we track from around the country, this is what we see:  Within existing sales, the share of foreclosures and REO sales combined were down 9.2 percent in the first quarter of this year compared to last the last quarter of 2013, while the share of regular resales was up almost 2 percent.  Looking year-over-year the comparisons are even more significant: Foreclosures are down 24 percent in their share, REO sales down 20 percent, and regular resales up 11 percent.  Investor activity is indeed on the decline, with the investor share down 1 percent quarter-over-quarter.

Once again we can look at pricing as a key indicator that conditions are improving and not deteriorating. According to the NAR release, the median existing home price in March was $198,500, 7.9 percent up over this time last year.  Supporting continued price appreciation is the low level of supply, which remains below normal at 5.2 months of supply.

Despite continued rhetoric about higher mortgage rates hurting the recovery, the facts don’t support that concern.  The average interest rate on purchase mortgages on regular resales in the first quarter of 2014 actually declined 7 basis points from the fourth quarter of 2013 due in part to an increasing share of adjustable rate mortgages.  The average mortgage rate is up 12 basis points over the first quarter of last year, but as we enter the second half of the year, the year-over-year comparison will start looking better.


6/11/14: Metrostudy – NAREE’s 48th Annual Real Estate Journalism Conference

Posted in Events | Posted on 04-21-2014 | Written by Metrostudy News


NAREE’s 48th Annual Real Estate Journalism Conference

Celebrating 85 years of service to journalists – covering residential, commercial and financial real estate, home and urban design, and green building – NAREE helps members advance their careers as editors, staff writers, columnists, freelancers, bloggers and authors.

Wednesday June 11 – Saturday June 14, 2014

brad h

WHERE: The Westin Oaks Houston in The Galleria

AGENDA: Uptown Energy  Houston Conference Planner

Wednesday • June 11

8:45 AM – Registration, Cyber Cafe & Twitter Tutorial Desk Open

NAREE’s Meet the Press Sign up

9:00  AM -  Welcome Breakfast – NAREE University: Radio Shifts

10:05 AM – Opening Speaker:

Top 10 Residential & Commercial Real Estate Issues

10:40 AM – Residential Trends Workshop

11:30 PM – NAREE University: NAREE’s Tweet Up Lunch

12:50 PM – Clicks, Bricks & Sticks: Shopping Centers Tomorrow

1:45 PM – Designing Healthy Places

2:40 PM – Latest in Luxe Housing

3:35 PM – Multifamily Boom

4:30 PM – NAREE University: Freelancing Forum

5:00 PM – Opening Reception -  Westin Oaks

6:15 PM – Uptown Up-Close Reception: Hines WaterWall Place

9:00 PM – NAREE President’s Suite – Westin Oaks -  Daniel Taub, Bloomberg News

Thursday • June 12

8:00 AM – Registration, Cyber Café  & Twitter Tutorial Desk Open

NAREE’s Meet The Press Sign up

8:00 AM  – Design Trends Breakfast

8:30 AM – NAREE University: Blogging Boosts

9:25 AM – Home Building Boom

10:20 AM – Commercial Real Estate Issues

11:20 AM – Mortgage Matters

12:15 PM – NAREE University Lunch: New Digital Media Species

1:30 PM -  Online Real Estate Forum

2:35 PM – Mobile Lab – Urban Waterfront & Sustainable Downtown Trends

9:00 PM – NAREE President’s Suite

Friday • June 13

8:00 AM – Registration, Cyber Café  & Twitter Tutorial Desk Open

NAREE’s Meet The Press Sign up

8:00 AM – NAREE University Breakfast: Covering Luxury Real Estate

8:55 AM – Mid-Year Economic Forecast

10:00 AM – Keynote Speaker

10:35 AM – Real Estate Insights

11:45 AM – Bruss Real Estate Book Awards Luncheon

1:10 PM – Design Trends

2:05 PM – Realty Forum

3:00 PM – NAREE University: The State of Real Estate Coverage

3:45 PM – NAREE’s Meet the Press

5:00 PM – TGIF Reception – Westin Oaks

6:15 PM -  64th Annual NAREE Journalism Competition Awards Reception

8:30 PM – NAREE President’s Suite

Saturday • June 14

8:00 AM – NAREE University Breakfast: Saturday Morning Review – Journalism Award Winner

9:20  AM – General Membership Meeting

9:55 AM – NAREE’s Saturday Sojourn – The Luxe Tour

1:45 PM – Bus Arrives at Bush Airport and Heads to Westin

SPEAKERS: Metrostudy’s Chief Economist, Brad Hunter along with many others!


Contact: Mary Doyle-Kimball, NAREE Executive Director


Metrostudy’s Hunter Says Housing Starts ‘Way Off’ (Audio)

Posted in National Housing Market | Posted on 04-21-2014 | Written by Metrostudy News

Brad Hunter, chief economist at Metrostudy in Palm Beach Gardens, Florida, says U.S. housing starts in March were “pretty flat” and “way, way off what would be normal.” Hunter talks with Bloomberg’s Tom Keene and Michael McKee on Bloomberg Radio’s “Bloomberg Surveillance.”

This was a great interview with so many topics covered! Listen Here

5/06/14: Metrostudy – GHBA, Bay Area Builders Association’s Mid-Year Forecast Luncheon

Posted in Events | Posted on 04-18-2014 | Written by David Jarvis


GHBA, Bay Area Builders Association’s

Mid-Year Forecast Luncheon

Join us May 6th where we will hear David Jarvis from Metrostudy discuss Houston’s current pace of economic growth, area Housing and Lot Inventories and Projections for the year.

Tuesday May 6, 2014

david j

WHERE: La Brisa Mexican Grill – 501 N. Wesley Dr., League City, TX 77573

AGENDA: 11:30 AM – 1:00 PM

BABA Lunch Registration – Midyear Forecast Luncheon cost is $20.00

For More Information and Registration Click Here

5/02/14: Metrostudy – Minnesota Real Estate Journal’s 10th Annual Land Development Conference

Posted in Events | Posted on 04-18-2014 | Written by Ryan Jones


Minnesota Real Estate Journal’s 10th Annual Land Development Conference

4 Hours of Real Estate CE Credits Have Been Applied for.

Contact: Minnesota Real Estate Journal
New Address:
13400 15th Ave North Suite C
Plymouth MN 55441

Click Here for More Information

Friday May 2, 2014

ryan j

WHERE: Golden Valley Country Club

AGENDA: 8:00 am Draft forecasts to 2040

Forecasting the next 30 years of metro development: Modeling for site selection and development planning.

-       Todd Graham, Principal Forecaster, Metropolitan Council

8:20 AM Developer Tool Kit 2014

“ A fast paced overview of the key tools that you will need as you prepare for your next development”

-       Brian McCool, Shareholder, Fredrikson & Byron, P.A.

-       Joseph Springer, Shareholder and Chair of Construction Group, Fredrikson & Byron, P.A.

-       Linda Fisher, Of Counsel, Fredrikson & Byron, P.A.

9:20 AM Residential Home Builder and Developer Update

-       Moderator: David Siegel, Executive Director, BATC

-       Mike DeVoe, President, Ryland Homes

-       Jon Aune, Lennar

• Evaluating land prices: Where they were, Where they are at and Where are they going

• Evaluating bank owned lots and what is left to be traded

• What is the market for raw land and what does the deal need to look like today

• What are the builders buying and why

• How are land deals structured today and how is it different from the boom

• What future opportunities exist

10:10 Break

10:20 AM How to Effectively Work With Municipalities

-       Moderator: Chris Eng, Executive Director, City of Duluth

-       Bridget Konrad, Economic Development Director, City of North Branch

-       Amy Baldwin, City of Brooklyn Park

-       Deanna S. Kuennen, Economic Development Director, Rice County

-       Stan Gustafson, City of Cambridge

• Annexation of parcels into cities

• How cities our effectively working with builders to fast track the approval process

• What are municipalities doing to curtail the increased costs of permitting

• How are municipalities effectively working with home builders and commercial developers to spur growth

• What are cities doing to attract investment in their communities

11:00 AM Market Update

-       Ryan Jones, Regional Director, Metrostudy | A Hanley Wood company

• Inventory status: Inner Ring vs. Outer Ring.

• Current and future absorption

• Land prices: Where are they now and where are they headed

• How does Minnesota stack up to the rest of the United States

• Interest rates and other economic conditions affecting consumer confidence

11:20 AM What are the real Opportunities for Commercial Development

-       Moderator: Tom Musil, University of St. Thomas

-       Tony Barranco, Vice President of Development, Ryan Companies US, Inc

-       Tony C. Phelps, Senior Director, Real Estate Development | Opus Development Company, L.L.C.

-       Brian Pankratz, Vice President, CBRE | Land Services Group

-       Tanya Bell, Principal, Grand Real Estate Advisors

• New opportunities for development is happening in urban core right now

• What types of projects are in consideration for land development?

• What needs to happen to get the market moving? Or do we have to wait until after the election

• What are the challenges with land development vs. redevelopment?

• Who is active in the market place and what is their risk tolerance and expected returns

• When or will there be a next big wave of land development or is it a thing of the past

12:00 PM Adjourn & Networking

Click Here for More Information

5/13/14: Metrostudy – RMA Annual Real Estate Breakfast

Posted in Events | Posted on 04-18-2014 | Written by Bill Miley


RMA Annual Real Estate Breakfast

Please join us for an informative discussion of residential and commercial real estate in the Charlotte area. We look forward to Bill and Frank’s discussion of our market followed by a question and answer session.

Tuesday May 13, 2014

bill m

WHERE: Charlotte City Club – Interstate Tower Building (SE corner of Trade & Tryon)

121 West Trade St. Charlotte, North Carolina 28202

Parking available, please see pages 2 and 3 (parking will not be validated)

AGENDA: 8:15 a.m. Registration & Full Breakfast

9:00 a.m. Program

(Wrap-up 10:00 a.m.)

$30.00 – RMA Associate Members and $35.00 – Guests

Registration Deadline of noon on Friday, May 9th / Advance Registration Only

(Changes in reservation must be made by April 30th to obtain refund)

SPEAKERS: Metrostudy’s Regional Director for the Charlotte Market, Bill Miley and Frank Warren with Kimley-Horn & Associates

For Questions or Group Reservations: Please email or call Mark Guthrie at or (704) 362-5862.

Register online at:

Austin Housing Market Starts 2014 Strong: New Home Starts & Vacant Developed Lots up in a Big Way

Posted in Austin Market | Posted on 04-17-2014 | Written by Metrostudy News

Metrostudy, a housing information and consulting firm, reported today that their quarterly survey of the Austin market revealed a 16% increase in new home starts from 1Q-13.  Metrostudy’s survey recorded 2,209 new detached home starts in the first quarter of 2014, a 16% increase from 1Q-13’s total. Austin builders started 9,668 new homes in the last twelve months, representing a 15% increase year-over-year.  At the same time, area builders closed 2,045 new homes in the last three months, 2% more than the first quarter of last year.  Over the last four quarters, builders have closed 8,916 new homes, a 19% increase over the prior four quarters.

“The strength of demand over the last eighteen months has once again emboldened builders and developers to invest in new areas in order to keep up with the growing variety of buyers in the changing Austin market,” said Madison Inselmann Regional Director of Metrostudy’s Austin market.  “In order to meet the demand of today’s buyer, the market is moving into new submarkets and is introducing some new product offerings.”

“Just like last year, developers start 2014 strongly by delivering more than 2,500 vacant developed lots to the market in the first quarter.  Hopefully, unlike last year, this kind of delivery can continue through the end of the year as the Austin market remains tight on available lots,” says Inselmann.  The 2,584 vacant developed lots delivered in the first quarter represent the largest single quarter delivery since the first quarter of 2008.  Over the last twelve months, developers have brought 8,404 lots to market, more than 1,200 fewer than were absorbed over that same period.  As a result, the total lot count in Austin stands at 14,219, 8% below 1Q-13’s count.  The growth in new home starts has dropped the relative lot supply in Austin to 17.6 months, below the 20 months considered equilibrium in the Austin market.  “The lot delivery in the first quarter was a welcomed sight after the disappointingly light delivery to end 2013.  That being said, we won’t ease this lot crunch until we see consecutive quarters of delivery on this scale,” states Inselmann.

Amongst all of the positive metrics experienced in 2013 (increase in starts, rising prices, strong in-migration), one of the more significant numbers was the increase in model homes open for business.  By opening new subdivisions and sections, the market will be better able to meet the robust demand in 2014 more efficiently than it could by just extending existing developments, according to Metrostudy.

“The unusually cold weather may have kept traffic numbers down to start the year but the new home marketed continued to expand nevertheless.  With strong job and population growth at our backs, the new home market should continue to expand in relation to our ability to deliver lots to market.  As we do continue to expand, it will be important to keep an eye on affordability in the production home market, as the median new home price continues to tick up in relation to the median household income in the Austin MSA,” concludes Mr. Inselmann.

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industriesnationwide. 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.

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit

Digging Out from the Snow

Posted in National Housing Market | Posted on 04-16-2014 | Written by Brad Hunter

Metrostudy’s latest research shows that new home sales have tracked slightly lower than the same period last year, but things are turning UP in so far in April, at least for some builders.  Shaking off the winter blues, consumers seem to be moving ahead with the purchase of new homes with more confidence.  Builders in areas that were snowed-under a couple of months ago are now able to move forward with construction at a more normal pace as well.

The markets that didn’t get snow (Las Vegas, So Cal, etc.), suffered an unusually deep slump in sales this winter too, so weather wasn’t the main cause for the drop.  Things seem to be picking up in those areas as well so far this month.

Demand is improving, particularly in the move-up segment of the market, but mortgage financing is still an issue.


In Las Vegas, the FHA loan limit has dropped 28% from $400k to $287.5k in 2014.  As Greg Gross, our Las Vegas director says, new home base price is up 30% over last year (and incomes has certainly not risen that much).  This has already had a negative impact on housing demand.

The West lost momentum from the FHA resets and QRM changes in January as they impact first move up.  According to Steve Johnson, our So Cal director, the result has been “a learning curve for buyers” with transactions requiring more down payment or forcing the buyer to consider “less house,” or the resale market. The FHA limit was lowered from 500k to 335k in the Inland Markets, and the QRM debt-to-income ratio was lowered from 56% to 43%, both impacting demand.

Metrostudy’s expectation is that sales paces will get back to normal for the majority of builders over the next two months, but that some of them will end up “below plan” for the year, based upon their internal targets.

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. Metrostudy provides research, data, analytics and consulting services to help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  For more information, visit

4/14/14: Metrostudy – RMA Texas State Conference

Posted in Events | Posted on 04-02-2014 | Written by David Jarvis


RMA Texas State Conference

Thursday April 17-18, 2014

david j

WHERE: Norris Conference center.

AGENDA: Thursday 4-17

8:30-11:00  Roundtables (Mike Shaw coordinating roundtables)

Facilitators- YP Jaclyn Smith, Brannon Kroll

Large Bank-Tony Ross, Sonny Lyles, Will Ingram, Randy Majek

Community Bank-Mike Gunnels, Robert Messer, Burt Blacksher, Mike Marshall

11:00-11:20 Break with sponsors

11:20-11:30 Opening remarks-Dave Linaburg-conference chair

11:30-12:45 Keynote- Dr. Harold Hunt-Texas A & M (intro by Melanie Edmundson)

Unconventional Oil and Gas Activity in Texas and its Implications for Real Estate

1-2 First Breakout  Session

2-2:20 Break with sponsors

2:30-3:30 Sam Golden-Alvarez and Marsal-Interpreting the New Regulatory Landscape

3:45-4:45  Second Breakout Session

5-7 Reception

Friday 4-18

7:45-8:30  Breakfast with Sponsors and Awards

8:30-9:30 Industry Risk  Panel  (moderator-Tony Ross)

Banking-Bill Perotti-Frost

Oil and Gas-Patrick Leach- CEO Decisions Strategies

Health Care-Ivan Wood- Strasburger and Price

9:30-9:45  Break with sponsors

9:45-10:45  Social Networking-Tawn Williams, Amarillo National bank Eddy Badrina

10:45-12 Reid Ryan-President – Houston Astros

Break out session #1

ALLL and Pending Changes (Debbie Scanlon -BKD)

Cyber Security (Ron Hulshizer-BKD) (intro by Matt Bryant)

Audit and Loan Review-What your Reviewers Wish You Knew

MetroStudy’s (David Jarvis)

Breakout session #2

ALLL and pending changes (Debbie Scanlon BKD)

Professional Coaching and Growth (primarily for YP’s) (Jonathan Brinsden)

Audit and Loan Review-What your Reviewers Wish you Knew (Cynthia Dopjera –HarperPearson

Cyber Security (Ron Hulshizer-BKD) (intro by Matt Bryant)