Metrostudy Acquires New Home Trends

Posted in National Housing Market | Posted on 09-15-2014 | Written by Metrostudy News

Enhances Geographic Coverage and Service Offerings in Pacific Northwest

Washington, D.C. – September 15, 2014 – Metrostudy, Inc., a Hanley Wood company and the leading provider of primary research and analysis to the U.S. housing industry, announced today that it has acquired New Home Trends, Inc., a real estate research and consulting business serving the Pacific Northwest United States.

“The acquisition of New Home Trends represents an important step in Metrostudy’s growth strategy by enhancing our geographic scope and coverage,” said Peter Goldstone, CEO of Hanley Wood.  “The addition of Seattle, the 10th largest US MSA, completes our national footprint with local coverage in all of the top 20 MSAs.”

New Home Trends is based in Bothell, WA.  In addition to the Seattle market, New Home Trends offers extensive research coverage and analysis in Portland, OR, Boise, ID and Spokane, WA.

“Seattle is one of the fastest growing housing markets in the United States, making it an important growth opportunity for our customers,” said Chris Veator, President of Metrostudy.   “New Home Trends has deep knowledge and research capabilities in the Pacific Northwest that will greatly complement our existing Metrostudy platform and allow us to offer an even more robust and valuable product platform to our customers.”

New Home Trends will be combined with Metrostudy and operate under the Metrostudy brand name.  Todd Britsch, President of New Home Trends, will continue his leadership role in the business as Regional Director for the Seattle and Oregon region.

“We are extremely excited about this transaction and the opportunities it will create for our employees and customers,” said Britsch.  “Metrostudy has an exceptional management team that recognizes the value of our platform and our expertise in the markets we serve.  Our customers will greatly benefit from enhanced and additional services and functionality offered by the combined business.”

Terms of the transaction were not disclosed.

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 hanleywood.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 New Home Trends

New Home Trends provides the research and consulting needed to stay ahead of the Pacific Northwest’s dynamic Real Estate market. New Home Trends combines an extensive database of residential building information with experience, vision, and market knowledge and provides full-scale consulting services and on-demand reports for each community in the development process. For more information, visit www.newhometrends.com.

 

Indianapolis 2Q14 Housing Survey: Despite Signs of a Stabilizing Market, Forecasts Revised Downward

Posted in Indianapolis Market | Posted on 09-03-2014 | Written by Metrostudy News

  • New lot development is at highs unseen in years; Lot inventory is at lowest monthly level since 2006
  • Despite recent uptick in annual starts, 2Q14 New Home Starts down 2.3% over 2Q13
  • We are revising our initial forecast of 5,000-5,500 new home starts in 2014 downwards to 4,250-4,750 for the year

September 2014: Metrostudy’s 2Q14 survey of the Indianapolis housing market showed many positive signs of continuing recovery in the sector, not withstanding a mid-summer slowdown.  Including single-family detached units, townhouse units and duplex units in the six- county Indianapolis region; there were a total of 4,293 new units started in the twelve-month period ending 2Q14, an increase of 3.5% compared to the previous year. Despite the annual rate’s rise, the 1,233 units started in 2Q14 represents a decline of 2.3% over 2Q13.  The annual rate of closings rose in the second quarter. There were 4,088 closings during the twelve-month period ending 2Q14, a 4.3% increase in annual closings compared to the prior year. The second quarter number of 961 closings is down 5.5% compared to the 2Q13 total of 1,017 closings.

“The recent slowdown is not surprising,” said Chris Huecksteadt, Regional Director of Metrostudy’s Indianapolis market. “Many markets throughout the Midwest experienced significant growth in construction activity over the past two years at a growth rate that was not sustainable given the lackluster rate of job growth and elevated levels of unemployment still in evidence.”

Through the first half of 2014, the majority of counties surveyed by Metrostudy saw a decline compared to construction activity in the first half of last year. Hamilton County still leads the way with approximately 41.6% of all new home construction in the Indianapolis market occurring there.     Marion County is next representing 14.6% of Indianapolis new home construction over the past year.    These two counties will likely continue to account for the majority of all new home demand through 2014. In addition, Hendricks and Johnson Counties will continue to generate increased new home construction activity as builders begin to open more communities there.

“With the consistent pace of new home construction and a declining level of vacant developed lot inventory, the months of supply for lots in Indianapolis has fallen from a high of nearly 80 months in 2Q09, to a current level of just 29.5 months,” said Huecksteadt.  “This is the first time below the 30-month threshold since the peak of 2006. New lot development has begun to occur at levels not seen for several years.”

Every market area in Metrostudy’s survey saw a significant decline in the amount of vacant and developed lot inventory during the past year. The most dramatic declines have been in those markets that had limited levels of new lot deliveries: Hancock and Johnson counties. Approximately 100 and 400 lots have been absorbed in each of these counties respectively during the past twelve months.

There are good things occurring in the housing market: resale inventory continues to tighten and prices have been on the rise in the existing home market.  What is lacking is strong economic growth that would provide the fuel that the new home market needs to expand.  Given the current economic situation and inventory levels of both existing and new homes, Metrostudy expects from 4,250 and 4,750 new home starts in 2014.

For information contact Chris Huecksteadt @ 847-651-9080
email chueck@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 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 hanleywood.com.

Top 20 Master Planned Communities Midway through 2014

Posted in National Housing Market | Posted on 09-03-2014 | Written by Metrostudy News

You cannot build a home without a Lot.  The availability of lots and ability to refresh supply has become the theme this year, as competition rises throughout the country.  Based on Metrostudy’s quarterly lot-by-lot survey, the Top 20 MPCs started more than 14,800 homes in the past twelve months, roughly the same as the number of starts noted in 2Q13 at 14,900 (still 60% above levels in 2Q12).  Starts still outpaced annual lot deliveries among more than half of the Top 20 MPCs, with a combined total of 13,700 lot deliveries over the last four quarters.  Of the seven MPCs that started fewer homes annually between 2Q13 and 2Q14 compared the previous year, only one delivered more lots than it had twelve months earlier.  Additionally, while lot deliveries are expected to increase further into early 2015 in most areas, as long as home starts grow at even a modest pace, lot supply will remain constrained, leading to continued change among communities within the Top 20 MPCs.

Central Florida’s The Villages remains the top MPC in the country with 3,447 annual new home starts through 2Q14.  The Villages also delivered the most lots over the past twelve months, more than 3,100, accounting for 25% of all annual lot deliveries in the Central Florida Market.

The biggest gains in starts activity were achieved by the Great Park in Orange County, California.  Opening last year at this time, the redevelopment of the former El Toro Marine Corps Air Station posted more than a 2168% gain in starts over the past twelve months (+542 homes started).  Nearby, the Rancho Mission Viejo community followed with a 256% increase and starts in  Houston’s Canyon Gate West and Jacksonville’s Nocatee communities rose by more than 50%.

(Note: Please click on the chart to view a larger image)

MPC Sept.

 

There were five new additions to the list over the past 12 months (see chart).  Those communities slipping out of the top 20 this year include:  Sienna Plantation, Mountain House, Highlands Ranch, Firethorne, and Westridge. 

Additional highlights from the Top 20 Master Planned Communities:

  • Production is increasing throughout the nation, but Texas still carried eight of the top 20 spots on the list, with Houston holding seven spots and Florida reporting four communities.  Nevada and California each reported three communities, while Colorado and Utah each netted one.  Communities within Arizona and Washington DC are on the rise and challenging to enter the Top 20 (both have at least one community within the next ten spots).
  • 13 of the Top 20 MPCs started more homes during the past 12 months compared to the previous 12 months. Only six communities, however, have delivered more lots over the past twelve months than they started.
  • The highest rising communities on the list were new entry, Great Park (at #9), Nocatee rising from #10 to #3, and Stapleton, up from #11 to #7 through the end of 2Q14.
  • As noted earlier, the largest year-over-year gain in start production were reported in Great Park (+2168%), followed by Rancho Mission Viejo (+256%), Canyon Gate West (+68%), and Nocatee (+53%).  Declines occurred in seven communities among the top 20 MPCs, including Cinco Ranch (-34%), Mountain’s Edge (-34%) and Providence (-34%). 
  • Four of the communities on the list were less than 15% away from build-out through 2Q14:  Cinco Ranch, the Woodlands, Nocatee, and Mountain’s Edge.  Only two communities were less than 40% complete:  Great Park and Daybreak.
  • Two developers achieved multiple MPCs on the list:  Johnson Development (all three MPC’s were in Houston) and Focus Property Group (both in Las Vegas).
  • Seven of the Top 20 MPCs held less than a 10.0-month supply of Vacant Developed Lots.  Four communities were down to a 5.0-month supply or less:  Rancho Mission Viejo (2.7 months), Great Park (2.8 months), Stapleton (4.7 months), and The Villages (4.8 months).

These results are based solely on the Metrostudy lot-by-lot housing survey.  Results are not based on a phone survey to individual developers, nor homebuilders.  Metrostudy’s independent survey monitors the supply of detached and attached homes on a quarterly basis.  In most markets, our survey tracks all condominium, townhome, duplex, and single family construction activity.  The survey allows us to consistently and accurately track the size of the total market, as well as supply and demand within various levels of each market.  Further, it helps to establish the depth of each market and the scope of the competition.  The information included within this report has been collected in the field by Metrostudy staff, driving and surveying every lot in every community, within each market surveyed.  Rankings are based on the annual start activity of each master plan surveyed under this methodology.

 

Nashville 2Q14 Housing Survey: Strong Demand for New Homes Meets Rising Land Prices

Posted in Nashville Market | Posted on 09-02-2014 | Written by Metrostudy News

September 2014: Metrostudy’s 2Q14 field research of the Nashville eight county region housing market showed positive signs of construction growth as well as a tightening of available finished lots in more desirable areas.

Builders begin construction on 1,592 new homes in 2Q14, up 9% year over year from 2Q13 starts, and a 10% increase from the prior quarter starts level. On an annual bases construction starts were up by 23% year over year ending in June 2014 with builders starting 6,138 new homes during the past 12 months.

nashville 2q

 

New home closings experienced a 9% increase in 2Q14 compared to the same period one year earlier coming in at 1,402 closings for the quarter. Closings increased from the prior quarter as well and were up by 14%. The trailing 12 months of activity in the area resulted in 5,570 new home closings in the area through 2Q14, up 21% year over year.

With demand for new homes increasing Finished Vacant housing inventory (houses 100% finished and ready to be moved into) increased by 21% year over year to 804 units “But the FV months supply remained the same as from one year earlier, which is a low 1.7 months supply,” said Eugene James, director for Metrostudy, a local housing research company. “Equilibrium is about 2 to 2.5 months thus an under supply of finished homes still exists,” said James.

Although demand for new homes has been rising over the past few years and construction starts have been increasing, the delivery of finished buildable lots has not kept pace with this activity. Currently there are 11,604 Vacant Developed Lots in the region which calculates out to about a 23 month supply. However, certain submarkets have lot supplies as low as 14 months, and as a result, lot prices have increased substantially. “The end result will be higher home prices coming very soon,” said James.

For information contact Eugene James @ 404-510-1080
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 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 hanleywood.com.

Sacramento 2Q14 Housing Survey: With Prices Rising and Entry Level Product Evaporating; Builders are pulling back

Posted in Sacramento Market | Posted on 09-02-2014 | Written by Metrostudy News

 

  • While 2Q14 starts are up 2% from 2Q13, the Annual Starts rate is down 3.6% – the first decrease in the annual rate in three years
  • Average base price for new single family homes is up 8% YoY to $438k;
  • First time and Entry Level buyers are being squeezed: Home starts are shifting into the price ranges over $400k; starts of units priced under $300k have fallen substantially.

September 2014: Metrostudy’s 2Q14 survey of the Sacramento housing market showed new home starts improving as starts were up 2% from 2Q13, the first uptick after three consecutive quarters of declining numbers.  At the same time, the annual housing starts are down 3.6% from 2Q13, and closings are down 3%.  It has been three years since the market had a decrease in annual starts.

“Annual starts have been outpacing closings since 2Q12 which is indicative of increased demand,” said Greg Gross, Regional Director of Metrostudy’s Northern California market. “This increased start pace over the past year helped stabilize equilibrium.  Builders are now reacting to more seasonality and softening demand. Rather than be caught with excessive inventory, starts have pulled back.”

Our average “offer to build” base price for new Single Family detached homes is up 8% regionwide over a year ago to $438K as builders see both higher demand and increased construction costs.

“This quarter we have seen a continuation of the squeeze on entry level and first time home buyers as start activity continues to shift into the price ranges above $400K,” said Gross.  “We are seeing starts fall substantially in the range below $300K, and starts under $200k have essentially come to a halt.  This has a lot of implications for the market as home prices are increasing at a much faster pace than incomes.”

Price Shift in Housing Starts

sac

Finished inventory of housing has been steadily increasing over the past year. With 473 Finished Vacant homes, the market now has 2 months of supply, the highest level of finished homes since 2012, and a 57% increase over 2Q13. We expect to see more incentives and price adjustments as builders do not want to carry Finished Inventory.  The Sacramento market was under-supplied during the end of 2012 and beginning of 2013, but the rapid increase in standing inventory is something we will monitor closely as we finish out the year.

Lot deliveries in Sacramento California have slowed dramatically over the past few years, which has been helpful for those inventory levels.  Finished lot inventory has actually increased 11% over the past year and now stands at 13,772 and Months of Supply has increased to 57. While seemingly high, about 4,000 of these lots are in the outlying Sutter and Yuba Counties as well as within the Natomas area. This increase of lot development will make finished lots available in high demand areas. There were just over 800 new lots completed during the 2ND quarter alone. Understanding sub-market dynamics is crucial in the Sacramento Region. Metrostudy is tracking about 248,000 future lots with fewer than 7,860 lots being developed now; a fairly small number considering the size and potential demand of Sacramento California.

Metrostudy  expects demand to remain steady in 2014. However there are some indicators that point to slightly fewer new home starts compared to 2013. Primarily those being lack of lot supply, rapid price increases, and the expected increase in resale home inventory entering the market are all factors which may cause new home buyers to rethink their home-buying decisions during 2014. We expect to end 2014 with 3,000 new home starts for the year. Sacramento and the Stockton regions will likely benefit from the expanding Bay Area economy, as homebuyers seek more affordable homes outside of the Bay area.

For information contact: greg gross @ 916.231.9370
Email ggross@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 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 hanleywood.com.

 

Central Florida 2Q14 Housing Survey: With Price Growth Near Boom’s Peak, Buyers Will Have to get over Sticker Shock

Posted in Central Florida Market | Posted on 09-02-2014 | Written by Metrostudy News

  • What has happened to the construction rate of new homes priced under $150, 000 in Orlando?
  • How are builders helping buyers get over sticker shock?
  • What trend is forecast for the level of finished, but vacant housing supply?

September 2014: Metrostudy’s 2Q14 survey of the Orlando housing market showed 2,374 single family housing units started in the four counties of the Orlando MSA (Lake, Orange, Osceola, and Seminole).   This represents a decrease of 2.0% compared to last year’s quarterly starts rate of 2,422 units.

The annual starts rate of 9,460 units has increased by 18.3% over the past year. Single-family quarterly closings totaled 2,381 units, 19.2% higher than 2Q13. The annual closings rate (past 4 quarters) of 8,779 units is 28.3% above the rate of 6,845 units per year recorded a year ago.

Quarterly closings in Orlando continued the upward trend, although new construction activity slowed slightly from the first quarter. The flat trend in starts was echoed by many of the major markets in the southeast United States. With the growth in retail home pricing over the past year and the lowering of FHA lending limits, we expect uneven growth in activity over the next few quarters.

As in other parts of the country, the Orlando area is seeing a precipitous drop in new home construction at the lower end of the market, with annual starts under $150k down almost 60% from the annual rate as of 2013.

Annual Starts by Price Range

2q14 oralndo starts

 

“Strong new home construction activity for the past 18 plus months has spurred increases in retail pricing, often at a rate near the peak of the boom,” said Anthony Crocco, Regional Director of Metrostudy’s Central Florida market. ”Pricing has also been impacted by increasing labor and material costs, impact fees, and lot costs for both progressive lot takedowns and replacement projects.  Buyers must get over the sticker shock of these elevated prices. To continue to increase construction activity, builders must help the consumer prepare, and many builders are through the use of incentives.”

Total single-family inventory, which is comprised of units under construction, finished vacant units and models, equaled 5,142 units at the end of the second quarter, 7.0 months of supply. Housing inventory increased by 15.3% compared to last year.  Under construction housing inventory rose by 147 units to 2,931 units over the past year. Finished vacant inventory increased from 1,343 units last year to 1,848 this year.

This quarter, 1,796 lots were delivered to the Orlando MSA versus 915 lots a year ago. Vacant developed lot inventory stands at 24,789 lots, a decrease of 6.4% compared to 26,477 lots last year. Based upon the annual starts rate, this lot inventory represents 31.4 months of supply, a decrease of 8.3 months from last year. The number of units in housing inventory has increased over the past year, while the move-in pace has also grown. Both the number of units under construction and finished but vacant have grown, however the ratio is in equilibrium for the market. We do not expect the finished supply to increase significantly over the next few quarters as closings should remain strong.

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

Community          Annual Starts

Lake Nona DRI (Orange)……………..464

ChampionsGate (Osceola)……………224

Millenia Park   (Orange) ……………….. 205

Eagle Creek (Orange)………………….183

Summerlake (Orange)…………………179

Windermere Trails (Orange) ……….. 178

Wyndham Lakes Estates (Orange) .. 176

Anthem Park (Osceola) ………………. 162

Independence (Orange)………………155

Heritage Hills (Lake) ………………….. 145

For information contact: Anthony Crocco @ 919- 314-0420
Email acrocco@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 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 hanleywood.com.

 

Houston 2Q14 Housing Survey: Strong Employment Growth Continues to Fuel Housing Demand

Posted in Houston Market | Posted on 09-02-2014 | Written by Metrostudy News

September 2014: Metrostudy has released results from its 2Q14 survey of the Houston housing market, and for eight consecutive quarters we have seen an increase in the annual starts rate. The quarterly starts rate in Houston rose 16% to 7,977, and was up 3.5% when compared to the second quarter of 2013. The annual starts rate increased 1%, to 28,990 over the previous quarter, and up 10% from the second quarter of 2013.

The annual closing rate was up 13% from a year ago, the strongest level since the second quarter of 2008. Finished, vacant home supply continues to be constrained. The Houston market was at 2.7 months of supply.

“Houston’s housing market continues to outperform.  We are seeing strong pricing appreciation and low levels of inventory of finished product and vacant developed lots,” said Scott Davis, Regional Director for Metrostudy’s Houston Market. “After five and half years of strong job growth, the real challenge for builders in Houston’s new housing market is finding affordable lots in desirable locations.”

This finished-vacant months-of-supply metric is the number of finished-vacant homes divided by the number of move-ins over the last four quarters, then multiplied by twelve. Metrostudy has observed over the years that when this number rises above 3.0 and stays there, builders tend to reduce prices or make concessions, so this indicator is closely observed each quarter for emerging trends.

Vacant, developed lot (VDL) inventory continued to fall, down to 36,128 lots in the second quarter. This represents 15.0 months-of-supply, down from 43 months-of-supply recorded in the second quarter of 2009. At 15 months, this figure is far below the 20-24 months of supply that Metrostudy considers “equilibrium” for the Houston market.  VDL months-of-supply is calculated by dividing the number of developed lots by the current annual starts pace, and then multiplying by twelve.

Below are the top 10 communities in the Houston market, ranked by annual starts:

Rank Community

1       Cinco Ranch

2       Riverstone

3       The Woodlands

4       Cross Creek Ranch

5       Aliana

6       Canyon Gate West

7       Sienna Plantation

8       Woodforest

9       Firethorne

10     Pine Mill Ranch

“Housing markets in the northwest and far north sectors of the city remain strongest,” says Davis.  “Job growth from projects like Exxon at Springwoods and the opening of the Grand Parkway are really driving home development in those two submarkets.”

“With respect to buiders, Lennar remains the overall market leader, with DR Horton and Perry coming in close behind. Brighton Homes and KB Home are having a lot of success as well.”  Meritage, Village, LGI Homes, Ryland and Taylor Morrsion round out the top ten.

Housing Inventory is slightly above normal at 10.1 MOS. VDL inventory declined 5.8% quarter-over-quarter to 36,128, a 15.0-month supply. There were 6,375 lot deliveries in the quarter, and future lot inventory declined 1.1%, to 73,548.

For information contact: Scott Davis @ 713-622-9909 x132
E-mail: sdavis@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 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 hanleywood.com.

Charlotte Housing 2Q14 Survey: The Price of “Dirt”, Zoning, and Financing Impacts Future Residential Development

Posted in Charlotte Market | Posted on 09-02-2014 | Written by Metrostudy News

  • 2Q14 Housing Starts up 9.2% over 2Q13
  • 2Q14 New Home Closings up 19.3% over 2Q13
  • Levels of Finished Vacant New Homes has Dropped to the Lowest Supply ever in Charlotte

September 2014: Metrostudy’s 2Q14 survey of the Charlotte housing market shows continued strength and improvement. Starts and Closings are up. Total inventory supplies are well within equilibrium. Finished Inventory supplies are low relative to our increased closings. Vacant Developed Lot supplies for the total Charlotte market are fast approaching equilibrium but are in short supply in Charlotte’s most desirable submarkets.

2Q14 starts for all product types were 2,469, a healthy and needed increase from last quarter’s 1,979. 2Q14 starts were 9.2% higher than the 2,262 quarterly starts from a year ago in 2Q13. Charlotte’s annual starts (rolling four quarters) as of second quarter rose to 9,380, ahead of last quarter’s annual total of 9,173.  2Q14 Closings totaled 2,249 units, 280 more than our 1Q14 closings. Compared to one year ago, Charlotte’s 2Q14 closings increased by 19.3%. Annualized 2Q14 closings broke through the 9,000 mark with 9,093 for all product types. Last quarter’s year over year total was 8,730.

Bill Miley, Metrostudy’s Regional Charlotte Director says we don’t need to be economists to determine Charlotte new housing trends.  The supply of new homes (as well as resale listings) is very low. Low supply will lead to higher prices.  Through the first half of 2014, we are ‘using up’ more than twice the number of vacant lots via starts (4,427 1st half starts) versus new lots being developed (2,267). That’s a lot supply train wreck heading at us. It has always been true that builders and buyers can move farther into the exurbs and find better affordability. With the ‘closer in’ lots gone and impossible to replace at today’s lot prices, growth will continue, as it always has, a little ‘farther out’.

Single Family Detached Housing: Charlotte’s 2Q14 Quarterly starts of single family detached new housing units increased to 2,259 up 23.5% from 1Q14.  Quarter over quarter Annualized single family detached Starts totaled 8,617 up from the 8,415 as of first quarter. Detached Annual Closings in Charlotte were 8,173 new homes, up from 1Q’s 7,779.  The 4,151 detached inventory homes as of 2Q14 reflect a low 6.1- month supply, unchanged from the 6.1 supply in 1Q14.

Attached Housing: Quarterly Starts of all attached housing totaled 210, up from 151 in 1Q14. Charlotte had 763 year-over-year Attached Starts at the end of second quarter. Annualized Closings as of quarters’ end continue to decrease, now at 920 units. Over all Attached inventory numbers and supplies continue to decrease due to the reluctance of builders to start new buildings and inability to obtain financing.

Townhomes: Quarterly Starts increased to 195, up from last quarter’s 140. These starts were badly needed to help replenish the inventory supply that had been under six months for the past three quarters. Annual Townhome starts as of 2Q14 rose slightly in Charlotte to 686. Town home closings will continue to increase as the finished supply improves. Affordable townhomes remain in short supply.

Condominiums: Annualized condominium starts throughout the Charlotte market as of second quarter of 2014 totaled 75 units with 15 new second quarter starts. The 116 units of condominium inventory, relative to annual closings, put the current supply level at 8.9 months.

Total inventory of homes in all stages of construction (Model Homes + Finished Vacant + Under Construction) rose slightly to 4,652 in 2Q14 over the previous quarter but not enough to increase the monthly supply level which remained unchanged at 6.1 months. Months of supply remained low due to the calculation of monthly closings relative to 2nd quarter inventory numbers. A 6-8 month supply of inventory is considered to be in equilibrium.

When viewed relative to Annual Closings, the 1,164 units of Finished Vacant Inventory dropped to the lowest supply we have ever recorded in Charlotte at 1.5-months, down from the 1.6 monthly supply that existed at the end of 1Q14. We closed more new homes in 2Q14 than we completed. A ‘normal’ supply of finished inventory would be 2-2.5 months.

The total number of Vacant Developed Lots in the market at the end of 2Q14 continued its rapid decline to 25,972. We have absorbed 4,448 lots in the first half of this year while only 2,345 newly developed lots have been delivered.  Relative to demand, the 25,972 Vacant Developed Lots in Charlotte represents a 33.2 month supply, falling from the 35.5-month supply at the end of 1Q14 due to Charlotte’s significantly higher starts compared to the new lots being put on the ground. At our current rate of absorption we should be under a 30 month supply by year’s end. Equilibrium is considered to be 24 to 30 months.

“Today, the Vacant Developed Lot Supply in our nine county Charlotte market has dropped to a 33.2 month supply; by market standards, still too high,” said Miley. “There are 964 ‘active’ subdivisions in Charlotte and by definition; they all have some Vacant Developed Lots. 204 or 21% of these subdivisions have not had a single start in the past four quarters- and it’s not because of price. Most date back to 2007 when builders needed lots anywhere and our housing market was running at full speed. Then the world changed. Today, those subdivisions are considered too far out for most builders and buyers. They are perfect candidates for long term investment purchase.”

Look at the vacant lot supply in Charlotte’s subdivisions where there have been at least 12 annual starts. (That’s only one per month). Charlotte’s Vacant Developed Lot supply plummets to 13.3 months! By market area, the VDL supply in Mecklenburg would be 11.7 months, Union 11.8, Cabarrus 12.6, Gaston 20.5, Iredell 21.6, and South Carolina (Lancaster & York). Both land prices, lender A&D requirement and local zoning restrictions are affecting our ability to replace subdivisions where we need them. This trend is affecting  future affordability and impacting both starts and closings, as it is in every major housing market in the country.

For information contact: bill miley @ 704-650-7584
Email bmiley@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 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 hanleywood.com.

Twin Cities 2Q14 Housing Survey: Despite Pullback, Market Showing Consistent Growth

Posted in Twin Cities Market | Posted on 09-02-2014 | Written by Metrostudy News

  • The recent increase in new home demand has created a run on desirable vacant developed lots located throughout the metro; 2Q14 saw the lowest lot supply number since early 2007.
  • Almost 50% of all new homes started over the last 12 months were priced between $250k and $400k, the largest percentage of starts in that segment since Metrostudy began tracking the market;
  • While over 80% of the new starts are for single family homes, we expect that price and location pressures will drive consumers into townhomes and attached product lines.

September 2014: Metrostudy’s 2Q14 survey of the Minneapolis/St. Paul housing market showed slowing growth, as the market has been hit with multiple forces that have impacted new home construction.  Our survey showed 1,494 starts in 2Q14, up 35.6% from 1Q14 but down 10.4%from 2Q13.  The increase in activity is normal through the first two quarters as new home builds are generally either pulled forward into 4th quarter or pushed ahead to 2nd quarter. This winter’s brutal conditions impacted our starts numbers by approximately 10% in the 1st quarter so while there was an increase we expected to see a slightly larger jump in new home starts given the harsh winter.

The rate of annual new home starts for single-family and townhome units across the Twin Cities area was 5,765, up 5.3% over 2013 but a sizable drop off from the last couple quarters. The new home market is still continuing to show fairly consistent growth even with the recent pull back. Lingering impacts of the weak economy, flat wages and affordability concerns will constrain buyers.

“The increased demand for new homes has been facilitated by continued strength in the local resale market,” said Chris Huecksteadt, Regional Director of Metrostudy’s Minneapolis/St. Paul region.  “However, the significantly low level of existing homes on the market is causing some unanticipated inventory problems. Increasing home prices, low inventory and decreasing affordability has quelled momentum throughout the existing housing market causing some buyers to remain on the sidelines. The resale market will play a critical role throughout this year and could significantly impact new home sales.”

The majority of new activity remains strong throughout our top tier market areas, with the top 20 submarkets representing almost 60% of new home starts over the past 12 months. However, as lots prove scarce and increasingly costly throughout the “A” & “B” market activity is picking up throughout Otsego, Rogers, Savage, Chaska, Farmington, Waconia, Ramsey and Hudson as builders expand their footprint across the metro.

At the end of March 2014 there were 2,769 new housing units in inventory, up 136 from last quarter. Of that total, 2,035 units (73%) are under construction, 486 (17%) are finished vacant inventory and 248 (10%) are model homes. Housing supply fell compared to last year remaining very healthy at 5.9 months. Increased closings over the past twelve months helped push down our year end supplies to slightly below equilibrium levels of 6-7 months. Low housing inventory or more specifically low finished vacant inventory is one of the best indicators of the health of a housing market. Finished inventory months of supply sits at slightly above one month, which is actually below equilibrium, considered to be between 1.5-2.0 months. There are currently 20,690 vacant developed lots throughout the Twin Cities, a decline of 7.9% compared to last year.

“2Q14 represents the lowest lot supply we have seen since early 2007,” said Huecksteadt. “The recent increase in new home demand has created a run on desirable vacant developed lots throughout the metro region. Lot supplies across the seven county metro area are down to just 25.6 months, below pre-housing boom figures. As activity continues to increase we will need to see substantial lot deliveries across the metro in order to meet current demand.”

Lot pricing and availability is a concern throughout the top tier markets as land prices are quickly rising to pre-housing boom levels. New activity will continue to push outward in 2014 into our second and third tier market areas as land prices continue to rise.  Lot supplies still remain tightest in the $350,000 to $399,999 price segment as move-up buyers take advantage of low prices, strong inventory and low rates.

“Almost 50% of all new homes started over the last 12 months were priced between $250,000 and $400,000, representing the largest percentage of starts in that segment since Metrostudy began tracking the market,” said Huecksteadt. “Shifts in product size, style and needs have re-defined the new home market across the Twin Cities marking a return to a more balanced marketplace. Single-family homes continue to account for the majority of new home activity throughout the metro area, representing over 80% of all starts. However, townhomes and attached product should start grabbing market share, as location and prices remain challenging for single family development.”

The Twin Cities economy will likely continue to outperform the national economy, with unemployment remaining well below national levels, and net new job growth continuing to be positive.  Even as the market has slowed through the first six months of this year, healthy levels of price increases have occurred. The median sales price of an existing home is up 8.1% compared to last year, while the average sales price of a new home increased by 9.2%. The market has slowed, but it is in a much healthier condition today than during previous slowdowns in the market; new and existing home inventories are low and demand, relative to the levels of inventory in the market, is still high. Even with the slight decline in demand experienced over the first six months, there is still money to be made in the new home market in the Twin Cities.

For information contact Chris Huecksteadt @ 847-651-9080
email chueck@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 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 hanleywood.com.

Sarasota 2Q14 Housing Survey: The “Pause” is Over; Starts Up Even as Entry Level Construction Falls

Posted in National Housing Market, Sarasota - Bradenton Market | Posted on 09-02-2014 | Written by Metrostudy News

  • Single-family housing starts up 8.9% 2Q14 over 2Q13; Annual starts rate up 18%
  • While we are seeing both volume and price increases, 2014 price increases are more moderate than 2013
  • Starts of homes under $250k are down 19.3% from 2Q13 levels; starts over $250k are up almost 64%

September 2014: Metrostudy’s survey of the 2Q14 Sarasota/Bradenton housing market shows that the “pause” that started last fall is showing signs of abating.  In Sarasota-Bradenton, 1,056 single-family units were started in 2Q14, up 8.9% compared to 2Q13. The annual start rate compared to last year increased by 18.0%, to 3,839 annual starts. Single-family quarterly closings totaled 882 units, 15.6% higher than 2Q13. The annual closings rate was 3,582 units per year, 30.4% above the annual closings rate in the same quarter last year.

As in other regions, we are increasingly seeing declining levels of starts for new homes in the entry level price ranges. “For the twelve months ending June 30, 2014, new homes starts in price ranges under $250k totaled 1,448 units, down 19.3% from the 2Q13 annual activity,” said Tony Polito, Regional Director of Metrostudy’s Sarasota/Bradenton area. “Annual new homes starts in prices over $250k were up 63.6% for the twelve months ending June 30, 2014 versus June 30, 2013.”

Annual Start by Price Range

2q14 sara starts

The marginal 583 unit increase in the annual start pace was split: 346 less homes under $250k and 929 additional homes above $250k (159% of the growth came in the price ranges above $250k). The “pause” mostly affected Manatee County in 1Q14. During 2Q14, Manatee County rebounded strongly and recorded 596 housing starts, the highest level in four quarters and up 25.5% from 1Q13. During 2Q14, Sarasota County recorded 392 housing starts versus 363 starts in 1Q13, an 8.0% increase. Charlotte County is surveyed on a grid method only same quarter to same quarter starts are applicable.

Total single-family inventory, which is composed of units under construction, finished vacant and models, equaled 1,976 units on the ground at the end of the second quarter, a 6.6 month supply. Inventories increased by 15.0% compared to the same quarter last year.  Compared to last year, the under construction inventory rose by 128 units to 1,389. Finished vacant inventory increased by 37.0% from 284 units last year to 389 this year. However, the number of completions exceeded move-ins during the quarter and FV inventory increased by 68 units.

This quarter 839 lots were delivered to the Sarasota- Bradenton market. Vacant developed lot inventory stands at 37,957 lots, a decrease of 1.0% compared to 38,324 lots last year. Based upon the annual start rate, this level of lot inventory represents a 118.6 month supply, a decrease of 23 months compared to last year. At the end of 2Q2014, Manatee County had a 27.1-month supply, up slightly from a 27.1-month supply of VDL in 1Q2014. Sarasota County had a 33.9-month supply at 2Q2014, down from 37.9- month supply at 1Q2014. Housing activity increased in all three Counties, thereby reducing VDL months of supply.

“A review of deed records indicates that the “pause” had more effect on volume than pricing,” said Polito.  “While Sarasota is seeing both volume and price increases, the price increases are more moderate than in 2013. The major factors going forward will continue to be consumer confidence and general continued improvement in the national economy and the job market, which help retirees sell northern homes.”

TOP COMMUNITIES BY ANNUAL STARTS

Community                                        Ann Starts

Lakewood Ranch………………………………….559

The West Villages ………………………………..216

South Gulf Cove…………………………………..173

Grand Palm…………………………………………144

Palmer Ranch………………………………………129

Esplanade By Siesta Key ………………………..119

Heritage Harbour …………………………………111

Harrison Ranch……………………………………102

Greyhawk Landing ……………………………….. 87

Woodlands…………………………………………. 73

For information contact: Tony Polito @ 813.888.5151
Email tpolito@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 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 hanleywood.com.