Single-Family New Home Sales Up Year-Over-Year in January

Posted in National Housing Market | Posted on 02-25-2015 | Written by Metrostudy News

Sales of new single-family houses in January were at a seasonally adjusted annual rate of 481,000, according to estimates released today by the U.S. Census Bureau. This is 0.2% below the revised December rate of 482,000, but is 5.3 percent above the January 2014 estimate of 457,000. Metrostudy’s Brad Hunter breaks down sales expectations for 2015.

 

Sales of new single-family houses in January 2015 were at a seasonally adjusted annual rate of 481,000, according to estimates released today by the U.S. Census Bureau.  This is 0.2% (±22.2%)* below the revised December rate of 482,000, but is 5.3% (±22.1%)* above the January 2014 estimate of 457,000.

nhs jan

Read the Full Article on Builder 

 

 

In Tepid Housing Market, Builders Cater to Desires of Well-Off

Posted in National Housing Market | Posted on 02-25-2015 | Written by Metrostudy News

25million1-web-superJumbo

NEWTOWN SQUARE, Pa. — Lisa Gray spent a few months searching for a home that would span the generations, one where her two sons would want to bring friends throughout their teenage years and that her aging parents could navigate with ease.

She settled on a two-story house here tailored to include a game room for the boys and a first-floor guest bedroom to avoid the need for climbing stairs. The cost of most homes in this new development? Roughly $1 million — and up.

“I thought I would just build and make it exactly like I want,” said Ms. Gray, a managing partner at a venture capital firm, who moved into her gray-speckled-stone home three months ago.

Read Full Article from The New York Times

Atlanta Jobs Move Housing Closer To Full Recovery

Posted in Atlanta Market | Posted on 02-24-2015 | Written by Metrostudy News

  • The Atlanta region is showing strong job growth and strong levels of single-family home permits
  • Annual Single Family Home Starts are up 15% in North Atlanta, and up 28% in South Atlanta
  • Inventory Levels are low, and the difficulty of finding a replacement home is keeping many people from listing their existing home.

February 2015: The Atlanta employment statistics through December 2014 show that the region has experienced positive job growth through 4Q 2014. Net jobs in Atlanta through December 2014 increased by 67,400 positions, up 2.6% year over year. Atlanta ended the year as the eighth most populous MSA in the country, seventh for job growth and ranked third highest for single family building permits. Foreclosure activity has hit a twelve year low and resale inventory remains low. All key metrics point towards stronger housing growth for 2015.

“There were 73,099 single family detached used and REO properties sold over the past 12 months ending in 4Q 2014,” said Eugene James, Regional Director for Metrostudy.  “21% of these closings were REO sales (one year ago it was 25%). The 4Q14 median sales price was $166,900 11% above the year over year median sale price of $150,000. Pre- foreclosure activity continues to decline and is at a twelve year low, resulting in fewer foreclosed homes and additional upward pressure on home prices. December single- family listings moved upwards by 9% YoY to 15,700 but the months supply remains very low (and declined this quarter) to 3.8 months. Equilibrium or a normal month’s supply of resale inventory for the region is about 6 months. The difficulty of finding a replacement home is keeping some people from listing their existing home.”

Collectively the Atlanta region saw annual construction starts increase by 18% (as forecasted) to 16,437 and new home closings increased by 23% to 14,806 units closed (move-ins). Metrostudy expects slow but steady growth in 2015.

ATLANTA:

Metrostudy’s 4Q14 survey of the Atlanta housing market shows that there were 16,437 Annual Single Family Housing Starts in Metro Atlanta, up 18% from 4Q13. The fourth quarter 2014 Quarterly Starts of 3,993 were up nearly 18% as well, from 4Q13. Single Family annual Closings reached 14,815 units at the end of 4Q14, up a whopping 22.6% from 4Q13. 4Q14 Quarterly Closings of 4,087 are up 19% from the 4Q13.

Total housing inventory – a figure that includes houses under construction, model homes and finished but vacant or unsold houses, is at or below equilibrium levels and the months supply declined to 7.9. One year ago it was an 8.1 month supply.  The most important housing inventory metric to pay close attention to is the Finished
Vacant inventory (homes completed but unsold or still vacant) months supply which is at 2.9. Normal for the region is about 3.5 months.

According to Metrostudy the Atlanta metro area’s new home prices continued to climb higher this year closing out 2014 at a median price of $271,700, up 4% from the prior year and marks the fifth consecutive year that new home prices have increased year over year.

“The Atlanta metro area is creating jobs at a healthy pace, up 2.6% year-over-year and has averaged above 2.3% growth for the past two years. With 2.51 million people now employed, Atlanta has set a new record for total people employed. Despite good job growth, unemployment was relatively high due to migration into the region thus expanding the labor force faster than the economy could absorb. But solid job growth has spurred consumer confidence which is helping to move the housing market toward a stronger recovery. 2015 should be another good year for housing in the Atlanta region”, said James.

4q ATL

For information contact
Eugene James
404.510.1080
ejames@metrostudy.com

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 www.metrostudy.com

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; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com

Sequestration made for a Weak 2014; Indicators for 2015 are Up

Posted in Northern Virginia Market | Posted on 02-24-2015 | Written by Metrostudy News

  • 2014 was a lackluster year for Northern Virginia housing – New Home Starts were down 7% from 2013
  • Resale inventory remains low, so home values should continue to rise.  The median MLS home price in this region is now $394k, up 4.9% YoY
  • Metrostudy anticipates a 10% increase in starts this year for Northern Virginia.

February 2015: According to Metrostudy’s quarterly survey of the Northern Virginia housing market, home starts, attached and detached, in Northern Virginia numbered 8,100 during 2014, down 7% from 2013. Expectations for last year were much higher, but the toll of sequestration on housing carried through all of last year. Annual new home closings were also down as builders closed 8,355 units in 2014, a decline of only 1.4%, but the market should pick up this year if the local economy continues to improve.

“In the resale home market, supply is down due to seasonality, but it is up from one year ago,” said Ben Sage, Director of Metrostudy’s Mid-Atlantic Region. “December resale listings in Northern Virginia numbered 9,653 units – attached and detached – up 24% from a year ago. Despite this sizeable increase, resale inventory corresponds to only 3 months of supply, which is very low. Nationally, 6 months is considered normal, so home values should continue to increase.”

In 2014, Northern Virginia MLS sales numbered 38,691 units for the year, which is down 6 percent from the previous year. The median price of a home sold through the MLS in this area reached $394,000 in December, which is up 4.9 percent from one year ago.

Northern Virginia 4Q14 Annual Starts by Market Area

4q nva

Loudoun County remains the most active market area in Northern Virginia, generating 3,484 starts last year, down 8% from the previous year. The Loudoun County housing market has been a major beneficiary of defense-related jobs in Northern Virginia, but the weakness in the Scientific/Technical employment sector has adversely affected builders in this area. Affordability is another issue, as the median new- home price has grown from $428,500 in 4Q11 to $524,600 in 4Q14, a 22% increase in only three years. Loudoun furthermore suffers from a shortage of lots, as vacant developed lot inventory measures only 17 months as of 4Q14.

Prince William County is the second most active
area with 1,355 annual starts, which is also down
from one year ago – minus 5 percent. In fact, of
the six most active counties in terms of starts, only two generated an increase in annual starts
from one year ago. The 160 starts in Culpeper
are up 43 percent, and the 280 starts in Frederick
are up 8 percent.

The overall inventory of vacant developed lots (VDL), or finished lots, numbered 22,880 at the
end of 2014, up 7% from the
previous year. This is for all product types, including attached product as well as custom lots.
With starts down, the supply of VDL has grown to 34 months up from 30 months at the end of 2013. This is above normal for the area, but supply varies greatly by market area. Supply is generally smallest in the counties with the most starts: Fairfax (11 months), Loudoun (17 months), and Prince William (21 months). Higher lot supplies persist in Caroline, Warren, Orange, and King George Counties.

Given the relative weakness in the demand indicators, it becomes increasingly important to monitor new-home supply. Finished vacant new homes in Northern Virginia number 1,149 units, which is up 6 percent from the previous year. Current inventory would last only 1.7 months at the 2014 closings pace. This is up from 1.5 months at the end of 2013, but it is still quite low. It has been a challenge for builders to sell homes of late, but incentives have been effective at moving product and keeping inventory under control.

“Now that 2014 is in the books, and it was a
lackluster year to say the least, there is hope for
this year,” said Sage. “The national economy is gaining steam, and the DC Metro job market finally has a
pulse. Resale inventory is low, as is new-home
inventory, which are major pluses given the
mediocre demand. Assuming the forecasted job
growth materializes, Metrostudy anticipates a 10percent increase in starts this year for Northern
Virginia. Affordability remains an issue, and high
land prices will not help that problem, but
population growth created by new jobs will have
to be accommodated.”

For information contact
Ben Sage
703.574.8429
bsage@metrostudy.com

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 www.metrostudy.com

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; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com

Sequestration Hangover led to a lackluster 2014; Modest Growth Expected in 2015

Posted in Maryland Market | Posted on 02-24-2015 | Written by Metrostudy News

  • Our 4Q14 survey shows 2014 annual new home starts down 1.1% from 2013
  • Strength in the DC Condo market is offsetting weakness in the Maryland housing market
  • Maryland is one of the most land constrained markets in the country, and the overall inventory of vacant developed lots is down 3.5% from 2013

February 2015: According to the Metrostudy quarterly survey, home starts, attached and detached, in Maryland
– which includes nearly the entire state save the
Eastern Shore south of Queen Anne’s County –
numbered 9,111 during 2014. This is
down 1.1% from the previous year, but we
do include The District in our Maryland territory. The housing market has been strong in DC, so
Maryland starts alone declined 6%. This
was not expected, but the effects of the 2013 sequestration appear to have carried over into the housing market last year despite an expanding Baltimore economy.

“The median price of a home sold in Maryland through the MLS reached $259,000 in December, a 1.6% increase from $255,000 12 months prior,” said Ben Sage, Director of Metrostudy’s Mid-Atlantic Region.  “The median price in Suburban Maryland is $285,000, which is up 6.4 percent from one year ago, while Baltimore – at $230,000 – is down slightly. Median price is not the best indicator of home price appreciation. According to Clear Capital’s repeat-sales index for 4Q14, home values are up 4.3% year over year in the DC Metro area and up 0.2% in Baltimore.”

In the resale home market, supply is growing while sales are increasing, both of which are signs of confidence in the housing market at this stage of the cycle. December single family resale listings in Maryland numbered 20,059 units, attached and detached, which is up 16% from a year ago even though it is down in recent months due to seasonality.

In terms of starts activity, Maryland is led by
Montgomery and Prince George’s Counties in DC
Metro and Howard and Anne Arundel in Baltimore
Metro, combining for 52% of Maryland’s
annual starts. Thanks to a fair amount
of new condominium construction, The District is
now generating almost as many starts as Howard
County, which is down due to a shortage of lots.

The overall inventory of vacant developed lots (VDL), or finished lots, numbers 12,692, which is down 3.5% from last year. This is for all product types, including attached product as well
as custom lots. The corresponding months of
supply has remained steady for the last 6 quarters. Current supply of 17 months
is quite low, as this is one of the most land
constrained markets in the country. The supply
of VDL varies by county, but it is generally lowest
in the most active submarkets and in infill areas: Washington DC (3 months), Howard (7 months),Montgomery (9 months), and Baltimore (12
months). Higher lot supplies persist in Cecil, Calvert, Baltimore City, and more recently in Harford County where starts have fallen off.

With Maryland being such a land-constrained market, much attention is focused on future lot supply. Metrostudy follows and reports on the entitlement of over 200,000 future lots in the state, but only 24,789 of these are recorded at the counties. Currently, Prince George’s County has the most capacity to meet current and near-future demand needs.

As new-home demand has declined slightly, it appears that builders remain disciplined with spec inventory. Finished vacant new homes number 1,944 units in Maryland, which would last 2.7 months at the current closings pace. Single family and townhome product accounts for 90 percent of Maryland starts, and their combined months of supply measures only 1.5 months. While this is up from 1.25 months one year ago, it is still quite low.

“Despite some momentum in The District due mainly to condo construction, Maryland experienced a very lackluster year for new homes in 2014,” said Sage. “While Baltimore generated some jobs last year, the Washington DC economy appears to be holding the entire region back. Assuming a turnaround from the sequestration hangover, Metrostudy expects Maryland housing starts to grow a modest 5% this year.”

For information contact
Ben Sage
703.574.8429
bsage@metrostudy.com

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 www.metrostudy.com

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; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Strong Regional Growth is Fueling Housing Demand; Affordability is a Serious Concern

Posted in Charlotte Market | Posted on 02-20-2015 | Written by Metrostudy News

  • New Home Starts Ended 2014 slightly up over 2013
  • We are definitely seeing an affordability squeeze: the average price of a new home in 2014 was $295k, unaffordable for Charlotte’s average household income.
  • The rising cost of land and construction continues to impact entry level housing construction – new home starts below $200k are down 7% even as starts between $300-400k are up 18.6% YoY

February 2015:  Metrostudy’s 4Q14 survey of the Charlotte housing market shows that new home builders started construction on 2,058 homes, up 1% over 4Q13. Quarterly Closings – previously unoccupied new homes that now are occupied – totaled 2,325, up 5.5% YoY.  The 9,226 annual starts surveyed through the end of 4Q14 was 1.1% higher than 2013.  The annual closings figure of 4,046 was 7.4% more than 2013.

Charlotte continues to make headways – adding more jobs, and increasing housing starts. Tight land and lot inventories have constrained the pace of growth in recent quarters; however there are signs that this trend may be nearing an end.

“Starts of new homes priced from $300,000 to $399,999 were up 18.6% from 4Q13,” said Bill Miley, Metrostudy’s Regional Director in the Charlotte market.  “The rising cost of land and construction continues to impact entry level housing construction. Starts on homes priced below $200,000 are down 7% from 4Q13. Homes priced above $500,000 now represent roughly 6.6% of overall activity. This segment saw gains in both starts and closings – 16% and 39% respectively – but home inventory was up 8%. Homes priced between $150,000 and $249,999, which represent 38% of the market, continue to see the lowest supply of housing inventory with a combined 5 months’ supply. “

Total inventory – models, finished vacant unoccupied new homes, and new homes under construction – equaled 4,596 units in 4Q14, slightly above the amount recorded in 4Q13. At current closing pace Total Inventory (Models, Finished Vacant, and Under Construction homes) represents a 6.1-months’ supply of homes, down from the 6.3 months’ supply seen in 4Q13. This range of inventory has historically been a point of equilibrium for housing inventories – a sign that level construction rates will drive prices higher.

The 24,374 vacant developed lots in the Charlotte in 4Q14 represent a decrease of 3,630 lots from 4Q13. At the current absorption rate, these lots represent a 31.7- months’ supply, well above the high end of Metrostudy’s normal range. Not all lots share equal demand. In Charlotte submarkets with the highest demand, lot supplies are well below equilibrium, and in some municipalities the entitlement timeline has been significantly longer than the 18-24 month average.

Over the last 4 quarters 5,963 new lots were developed in the Charlotte region, which is 6.5% more lots than were delivered through the end of 4Q13. The current pace of lot deliveries is 64% of the absorption rate (annual starts). The development pipeline is beginning to fill, and Metrostudy believes this gap will continue to narrow over the course of 2015.

Of the 9,226 new homes started in 2014, townhomes made up 8.6% of all new home starts, up from 7.7% in 4Q13.  Despite the increase this remains well below the 14.3% historical average, and significantly below the pre-recession average share of 16%.  Charlotte townhome builders started construction on 210 townhomes (THs) in 4Q14, 34% more than 4Q13. The annual starts figure of 789 homes was 12.7% greater than 2013.

Charlotte’s economy has been gaining steam and this has translated to greater housing development. While prices have been rising – driven by land, labor and material cost – affordability has been maintained for average income families. Median income families however have begun to feel the squeeze. The average sales price of new homes sold in the greater Charlotte area in 2014 was $294,828 and the average household income was $73,393. This indicates that at least for families that are earning at or above the average rate, new homes are still affordable. The median price of new homes sold in 2014 was $267,000. With median household income hovering around $52,000, this price point of home does not fit within budgets, and will be difficult to find mortgage financing.

“This is a trend that is being experienced across the country, and so far the path of least resistance for homebuilders has been to shift operations towards higher income earners and thus higher priced homes,” said Miley.  “With the post-recession housing slowdown, virtually all price points were underserved, and the rebound in housing starts has been primarily driven by the relief of pent-up demand. This meant that even though builders were shifting to higher price points the rate of growth was able to accelerate.  The challenge for the local new home industry will be growing the overall pace of housing as the price point of homes continues to move higher and the impact of entry level buyers will continue to wane. This creates opportunities for builders to innovate, and the market is already seeing some builders adjust and seek out underserved market niches.”

For information contact
Jay Colvin
919- 314-0420
jcolvin@metrostudy.com

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 www.metrostudy.com

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; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Affordability Squeeze in Raleigh: As Production Shifts to the Higher Price Points, Entry Level Buyers Feel the Pinch

Posted in Raleigh - Durham Market | Posted on 02-20-2015 | Written by Metrostudy News

  • 4Q14 New Home Starts are down 2.2% from 4Q13, the first drop in YoY starts since 2010 and an indicator that the recovery phase is over
  • Low inventories and higher demand has pushed land prices higher, which has squeezed the affordability of the market for the new homebuyer.
  • Starts above $350k are at 2007 levels even as starts under $200k are down 20% YoY

February 2015: Metrostudy’s 4Q14 survey of the Triangle’s housing market shows that builders started construction on 1,922 new homes, down 2.2% from 4Q13. Quarterly Closings – previously unoccupied new homes that now are occupied – totaled 2,051 units, a 3.3% decrease from 4Q13.   The 8,630 annual starts surveyed through the end of 4Q14 was 0.7% lower than the number of homes started in the same period a year ago. The 2014 annual closings figure of 8,612 was 4.8% more than the 2013.

“The fourth quarter is traditionally a slower quarter for new home starts, however the market has experienced year over year gains in the fourth quarter over the past three years as the market recovered,” said Jay Colvin, Director of Metrostudy’s Raleigh-Durham region. “This year’s decline is the first time the market has seen a drop in year over year starts since the post-tax credit period in 2010, and is seen as an indicator that the recovery phase of the housing cycle has ended.”

The 19,794 vacant developed lots in the Triangle in 4Q14 represent a decrease of 1,100 lots from 4Q13 levels. At the current absorption rate, these lots represent a 27.5- months’ supply. Metrostudy considers 18-24 months to be normal, as on average that is the amount of time it takes to entitle and deliver new home lots to the market. Not all lots share equal demand. In Triangle submarkets with the highest demand, lot supplies are well below equilibrium, and in some municipalities the entitlement timeline has been significantly longer than the 18-24 month average.

“The under supply of lots has been a major issue is restraining the market’s ability to deliver more homes, but there are signs that the tides are changing,” said Colvin. “Over the last 4 quarters 7,530 new lots were developed in the Triangle, 67% more than were delivered through the end of 4Q13. The current pace of lot deliveries is 87% of the absorption rate. The gap has been narrowing over the last few quarters and the trend of underdevelopment may be nearing an end. “

Lot and developable land inventories have been one of the biggest hindrances to increased housing production in the Triangle in the near term. Low inventories and renewed demand has resulted in land prices moving higher and the result has been that higher priced homes have gained share even as the overall rate of market activity has increased.

“The growth has been so strong in the $350,000+ market that production levels in these price points are at or above 2007 levels,” said Colvin. “In contrast the entry level market continues to shrink. Starts of homes priced below $200,000 – which account for 24.5% of the current market – are down 20%. The result has been that overall market activity has been flat or slightly down over the past year.”

The realities of continued higher variable cost of development and construction seem to be more structural. Labor supplies are still constrained and the costs of construction materials continue to increase as well. From a development side a longer more rigorous entitlement process – exacerbated by public concern about overcrowding of schools – along with land improvement delays and the resulting costs have all added to the price of finished lots and the resulting finished home price. These costs have so far been passed onto buyers with relatively little push back, as the market tapped pent-up demand and were able to leverage low inventory of homes. But as the market in the $350,000+ ranges has approached peak levels, remaining entry level inventory has eroded, and inventory in the luxury market has grown, sell side parties have seen their advantage wane, the pace of growth has slowed. At the same time the level of lot production has been picking up. Metrostudy sees this as a positive as it will enable the coveted submarket to once again grow total starts. However this growth will come at the expense of pricing power as inventories are expected to increase.

The expectation is that the land market will continue to see some softening and the price increase of land will start to slow down. A lower land cost basis would help the market provide some more mid-priced homes and enable some growth in those price points however it is still early on in this phase of the market cycle and it will take time before this scenario fully plays out. Metrostudy expects only slight gains in housing production in 2015.

For information contact
Jay Colvin
919- 314-0420
jcolvin@metrostudy.com

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 www.metrostudy.com

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; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Outlook for 2015 Housing is Tepid at Best; Multi-Unit Activity Dominates This Market

Posted in New Jersey Market | Posted on 02-19-2015 | Written by Metrostudy News

  • New Home Starts showed a significant decline of 41.3% from 3Q14; YoY activity is down by 54.6%
  • Multi-family product in the Northern New Jersey market continues to be the driving force in construction in this region.
  • Multi-unit structures are up 55.6% month to month and are up 2.6% year over year even considering year over year for November 2013 skyrocketed up plus 85.1%.

February 2015:  Metrostudy’s survey of the housing market in the Northern New Jersey/NY Suburbs region showed 671 starts in 4Q14, a decrease of 41.3% from 3Q14. Year over year comparison from 4Q13 versus 4Q14 saw an even greater drop off in new home starts activity by 54.6 percent. The Northern New Jersey/NY Suburbs region recorded 1,064 observed closings for 4Q14., down 17.3% from 3Q14.

“A product type break down shows that detached closings decreased 19.3% to 440 from 545 in the third quarter,” said Quita Syhapanya, Regional Director of Metrostudy’s Northeast region. “Year over year closings increased 1.4% but it is a disappointing number compared to the depressed starts that occurred during the harsh winter in 4Q13. Starts in detached single family also took a big hit with a decrease of 46.6% to 298 units in comparison to the 558 started in 3Q14. Year over year also reflected a decrease in new home starts by 50.9%.”

Attached homes saw a decrease in starts as well to 373 units from 585 in 3Q14, a 36.2% decrease and an even larger 57.2% decrease compared to this time last year.  This decline is particularly concerning considering attached product starts accounts for 56% market share. Closings saw a 15.9% decrease to 624 from the 742 from the prior quarter as well as a decrease year over year by 10.5% when there was 697 closings in 4Q13.

The median closing price for a new home closed in the Northern New Jersey/NY Suburbs in 4Q14 was $436,900, up 4.3% from 3Q14 and up 7.1% from 4Q13. The median closing price for a single family home for 4Q14 was $468,900, a .4% increase YoY and a 1.6% decrease from 3Q14. Pricing for new home construction has continued to slow down to wrap up 2014. We expect pricing to moderately increase in 2015 with no dramatic swings one way or the other.

For 4Q14 there are 9,742 Vacant Developed Lots (VDL) in the Northern New Jersey/NY Suburbs market, a 3.5% YoY increase in developed lots. With an annual starts rate of 3,905 it would take 29.9 months to go through the remaining lots at this pace, up five months from 3Q14. The Northern New Jersey/NY Suburban market remains in equilibrium but is moving closer to over-supply from the 1,761 lots that were delivered in 2Q14 that have not been absorbed. There were 635 lots delivered into the market this quarter. Year over year lot deliveries dropped by 33.3% from the 952 delivered in 4Q13. Quarter to quarter saw deliveries drop by 32.8%.

“With multi-family product type moving the needle north in construction it remains a struggle for new home builders to move new product in Central, Northern NJ as well as the New York suburbs,” said Syhapanya. “Looking at permit data 1 unit structures took a 4.7% decrease year over year and a 13.3% decrease month to month ending November 2014 which is our earliest indicator of a new home start. Meanwhile, multi-unit structures are up 55.6% month to month and are up 2.6% year over year even considering that year over year for November 2013 skyrocketed up plus 85.1%.”

The overall outlook on new home construction in the Northern New Jersey and NY Suburbs region is tepid at best. The activity for the 4th Quarter has stalled a great deal in comparison to the last few quarters and year over year. The region ended the year with significant signs of a struggling new home construction market. There were many factors in play that caused the drastic decline in construction activity. One of the main impediments was builders and developers playing catch up due to stalled construction earlier in the year with most of the activity starting in 2Q14 where we saw an increase of 35% in starts. On a rolling four quarters there was 3,905 annual new homes started ending 4Q14. To end the 3rd quarter the pace was at 4,712 new home starts. It was a 17.1% decrease in quarter to quarter comparing the pace ending 4Q14 versus 3Q14. The annual closings pace did not take the same hit due to the homes beginning to be occupied from the big jump in new home starts back in 2Q14. To end 4Q14 the annual closings pace ended the quarter at 4,757 new homes being occupied which is just a slight decrease off the pace ending 3Q14 by only a decrease of 1.4% when there was 4,824 closings.

“Multi-family product in the Northern New Jersey market continues to be the driving force in construction in this region,” said Syhapanya. “A hot topic of debate and discussion we will hear in the media is if there is an oversaturation of rental units in this market in the near future. I don’t believe at this point over saturation or bubble will form in the near term for rental units only because the entry level or first time buyer can’t get their foot in the door in regards to their jobs, flat income growth, debt, and not having enough for a down payment even with 3% down. They have no choice but to rent at this point. It may be a few years before they enter into buying their first home, in particular in this region where the job market is dominated by firms in Manhattan and NJ is having trouble retaining companies who are packing up and taking their jobs elsewhere. Buying will be in the equation just not now. Maybe after this group gets to their second milestone which is their first baby a home purchase will be in order!”

For information contact
Quita Syhapanya
215.893.9890 x231
qsyhapanya@metrostudy.com

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 www.metrostudy.com

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; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Despite Positive Economic Trends, the Philadelphia Market is Still Finding Its Way

Posted in Philadelphia - Market | Posted on 02-19-2015 | Written by Metrostudy News

  • YoY Philadelphia Region closings are up 6.8%
  • Quarter to quarter the region saw new home starts down 13.5% from 3Q14; while the Philadelphia MSA also saw starts down 14.6% from 3Q14
  • The median price of a single family home stood at $360k in 4Q14, up 3.9% YoY
  • The entire region is facing a shortage in Lot Supply that will play out differently from county to county

February 2015:  Metrostudy’s survey of the Philadelphia region’s housing market shows that 4Q14 starts totaled 2,336, down 13.5% from 3Q14. The Philadelphia region recorded 2,643 observed closings for 4Q14, down 8% from 3Q14.  The Philadelphia MSA had 1,393 closings in 4Q14, a decrease of 13.7% from 3Q14. Year over year closings are up 17%. Starts decreased for the MSA to 1,219 which was a 14.6% dip from 3Q14. Year over year saw a 9.9% increase in new home starts.

Annual starts pace for the region saw a very minimal decrease of .1% to 10,127 from 3Q14. The pace for the region for annual starts shows some stability in the region considering the 4th Quarter is typically a slower time for home building. The main counties driving activity for the entire region can be attributed to the state of Delaware. Sussex County, Delaware in particular is a hot market where activity is driven towards the East side of Route 1 towards the shore accounting for a significant amount of the activity for the region.

Total housing inventory for the Philadelphia region has dropped 3.9% quarter to quarter. Finished vacant inventory remained flat quarter to quarter rising only 2 units to 2,808 from 2,806. Finished vacant inventory is an early indicator of the health of the new home construction market. If finished vacant inventory continues to increase without being absorbed with an actual home buyer moving in quarter to quarter, as well as the months of supply continuing to increase quarter to quarter is an early sign of a weakening housing market. In the Philadelphia region it is also a valid indicator, but not the only indicator only because this market historically does not build too many speculative homes. We are a pretty tight market in regards to when we start a home. Most often a home that is finished vacant will be occupied at some point in the next 5 to 6 months after it started since the home most likely is under contract. Most communities in this market will only have one model home available if they have one at all.

Annual Starts pace and closings pace for the Philadelphia MSA in the 4th Quarter saw a 2.2% and 4% increase respectively off of the pace from 3Q14. The starts pace ended the quarter at 5,171 starts and closings came in at 5,193 closings. The Philadelphia MSA is led by the activity occurring in Bucks County, Montgomery County, Chester County, and New Castle County in Delaware.

“The median closing price for a new home in the Philadelphia region was $337,100, up 3.3% from 3Q14,” said Quita Syhapanya, Director of Metrostudy’s Northeast Region. “Year over year change was a 2.1% increase for 4Q14. The median closing price for a single family home ended 4Q14 at $360,100, a 2% increase over 3Q14 and a year over year increase of 3.9%. Price increases are due mostly to product type mix rather than any significant change to housing fundamentals.”

In 4Q14, there were 22,557 Vacant Developed Lots (VDL) in the Philadelphia Region. Finished lots decreased by 1.6%. Year over year vacant developed increased by 2.5% which is more to do with the fact that this time last year the region was hit with some significant weather that delayed new developed lots.

“Philadelphia County continues to be in short supply of finished lots with only 9.9 months of supply,” said Syhapanya. “Most of the new home construction occurring in Philadelphia is of the tear down and in-fill type of building.  The Philadelphia MSA also faces a short supply of available finished lots.  Our 4Q14 numbers show that there are only 8,318 finished lots available, a 19.3 months’ supply. Montgomery County, which is an in demand market with good schools, only has 16.3 months of supply. Delaware and Bucks counties are both still less than 20 months of supply for finished lots.”

The Philadelphia Region for new home construction has been an anomaly. Numbers swing back and forth due to seasonality in the Northeast. The housing market in this region is predictable only in that 99% of the time 4Q and 1Q to always be down relative to the other quarters when tracking activity. With seasonality it is important getting a gauge year over year to see how the market faired in the same three months in the previous year. The caveat this year is that around this time last year is where this region experienced the Polar Vortex which was thought to have slowed down the housing market not only in the Philadelphia Region, but across the country due to supply chain and logistics of manufacturers that are based out of this region.

The same positive forces that many experts and economist speak about in regards to continued low mortgage rates, economy strengthening, jobs market getting better, etc. are the same today that they were for the past few quarters. The only problem is that even with these positive factors housing is still caught in lull. So the same negatives are still staring the housing market in the face – like tight credit standards, a still tepid job market, debt for first time buyers, and high prices that have moved builder strategies to only build higher ticket homes. Many in the industry were disappointed by 2014’s housing market. Moving forward many who work in the housing industry are playing their cards close to the vest as they play the wait and see game. The market has slowed down this year but 2015 is expected to see growth in housing.

For information contact
Quita Syhapanya
215.893.9890 x231
qsyhapanya@metrostudy.com

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 www.metrostudy.com

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; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Jacksonville Housing: Metrostudy 4Q14 Survey Results Reveals New Trends

Posted in Jacksonville Market | Posted on 02-19-2015 | Written by Metrostudy News

February 2015:  Metrostudy’s survey of the Jacksonville Market – including Clay, Duval, Nassau, and St. Johns counties – shows that 1,142 single-family units were started in the 4Q14. This represents a decrease of 11.3% compared to last year’s rate of 1,288 units. Still, the annual starts rate compared to last year decreased by only 1.1% to 5,350 annual starts. Single-family quarterly closings totaled 1,257 units, up 6.1% from 4Q13. The annual closings totaled 5,520 units, up 18.1% from 2013’s number.

Starts and closings this quarter in Jacksonville were down significantly from 3Q14, which is not uncommon seasonality. However, since this year’s fourth quarter starts was well below last year’s fourthquarter, the annual starts rate declined. The annual closing pace continues to grow as slightly more units were occupied in 4Q14 than last year.

The Jacksonville new housing market’s pricing distribution continues to push into the higher ranges and weaken in the lower price points,” said Anthony Crocco, Director of Metrostudy’s Jacksonville region. “Recently, pricing increases have slowed and some of this change in distribution is due to the new projects opening at higher prices and older projects selling out at lower prices.”

Total single-family inventory, comprised of units under construction, finished vacant units and models, equaled 2,728 units on the ground at the end of the fourth quarter, a 5.9 months of supply. Overall, housing inventories decreased by 6.1% compared to last year.  As compared to last year, Jacksonville’s
under construction housing inventory declined by 18.2%, or 347 units to 1,562. Finished vacant inventory increased by
17.3% from 803 units last year to 942 this
year.

This quarter, 1,481 lots were delivered to the Jacksonville market, a 104.3% increase from 725 lots delivered in the same quarter last year. Vacant developed lot inventory stands at 15,675 lots, a decrease of 2.3% compared to 16,036 lots last year. Based upon the annual starts rate, this lot inventory represents 35.2 months of supply, a decrease of 0.4 months from last year.

“Overall housing inventory levels have been slowly declining on a relative and actual basis for about a year,” said Crocco. “There has been little change to the level of finished inventory, which is in good condition at approximately 38% of all housing inventory. The vacant developed lot inventory ratio has flattened over the last few quarters, at about 3 years supply, as lot deliveries have picked up and are approximately matching the starts rate.”

The resale housing market remains strong, although some foreclosure pressure remains. Even with foreclosures, pricing growth is good and inventories are tight.

“The new home market’s annual construction rate has been slowly declining for about a year,” said Crocco. “Closings are still growing and have exceeded starts for most of the last year, although barely. In the short term, we expect construction activity to pick up slowly, with very slow pricing growth except what is due to the change in subdivision mix  – more newly developed projects coming in, and older projects with discounted lot prices selling out.”

The following table identifies the top ten communities as defined by annual construction starts.

Community Annual Starts  

Nocatee (Duval) ………………………… 886

Durbin Crossing (St. Johns) ………… 277

OakLeaf Plantation (Clay)…………… 253

Bartram Park (Duval)…………………. 169

Palencia (St. Johns) …………………… 117

Pablo Bay (Duval) ……………………… 113

Las Calinas (St. Johns) ……………….. 104

Eagle Landing (Clay) ………………….. 103

Bainebridge Estates (Duval) …………. 97

Samara Lakes (St. Johns) …………….. 82

For information contact
Anthony Crocco
919- 314-0420
acrocco@metrostudy.com

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 www.metrostudy.com

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; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.