August 2014: Metrostudy has released results from its 2Q14 survey of the Naples/Fort Myers housing market, and for the twelfth consecutive quarter we have seen an increase in the annual starts rate. The quarterly starts rate in Naples/Ft. Myers rose 15% to 1,032, and was up 14% when compared to the second quarter of 2013. The annual starts rate increased only 1.4% to 3,511 over the previous quarter, but is up 21% from the second quarter of 2013. The annual pace has slowed a bit when compared to previous quarters, so we may be seeing a leveling out of starts in Southwest Florida, as we have in South Florida. Price increases and lot/labor shortages may be beginning to take their toll on the growth rate of starts.
The annual closing rate was up 25% from a year ago, which extends this upward trend to nine consecutive quarters. Finished, vacant home supply continues to be constrained. Lee’s supply increased slightly from 0.7 months of supply last quarter to a 0.9 months supply. Collier’s rate increased from 1.6 months of supply to 1.9 months of supply. Labor and lot constraints have prevented builders from creating an oversupply of homes.
“Both of these rates are well under the three months of supply that Metrostudy considers the high end of normal,” said David Cobb, Regional Director for Metrostudy’s Naples Market. “With 47 consecutive months of job growth in the state, we are continuing to see tremendous demand for new product. Almost every home under construction has been sold.”
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 remained flat at 11,660 lots in the second quarter. This represents 39 months-of-supply, down from 91 months-of-supply recorded two years ago in the second quarter of 2012. 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 Naples/Ft. Myers market, ranked by annual starts:
1 Riverstone (Collier)
2 Preserve Corkscrew (Lee)
3 Ave Maria (Collier)
4 Pelican Preserve (Lee)
5 VillageWalk Bonita (Lee)
6 VeronaWalk (Collier)
7 Plantation (Lee)
8 Bonita Isles (Lee)
9 Reflection Isles (Lee)
10 Moody River Estates (Lee)
“GL Homes, Pulte, Lennar, and WCI are the market leaders in Southwest Florida this quarter,” says Cobb. “Riverstone by GL Homes continues to impress as the overall market leader, while Preserve at Corkscrew by Pulte and Lennar is nearing build-out after a very successful run. Ave Maria moves up the list again to third place, and WCI’s active-adult Pelican Preserve remains a top five contender. DiVosta’s VillageWalk and VeronaWalk continue to see sales successes as well.” Plantation by Pulte, Bonita Isles by Minto, Reflection Isles by Lennar, and Moody River Estates by DR Horton round out the top ten.
Separated by County:
Lee County: Quarterly starts were up 21%, while quarterly closings were down 16% from 1Q14. The annual starts rate is up 13%to 1,808, and annual closings are up 29% from one year ago. Housing Inventory remains well below normal. Nine months of supply (MOS) is considered normal, but Lee’s housing MOS is the lowest in Metrostudy’s eight-county South Florida Region at only 5.6 MOS. The supply of VDL inventory declined 3% quarter- over-quarter to 6,899, a 44 month supply. There were 321 lot deliveries in the quarter. Future lot inventory remains stable at 48,766.
Collier County: Quarterly starts in the second quarter rose 11%, while quarterly closings jumped 28% from the previous quarter. The annual starts rate is up 13%, and annual closings are up 21% from a year ago. The annual starts rate has risen for twenty consecutive quarters, from a low of 399 in early 2009, to 1,703 in the current quarter.
Housing Inventory is slightly above normal at 10.1 MOS. VDL inventory rose 4% quarter-over-quarter to 4,685, a 33-month supply. There were 669 lot deliveries in the quarter, and future lot inventory declined 3%, to 23,058.
In both Lee and Collier counties, future lot supply remains sufficient in the near term, as there are over 11,000 lots under development in the two counties.
For now, it’s steady as she goes in Southwest Florida. Mortgage rates remain low, inventory is below equilibrium, job growth is positive, and the cities of Fort Myers and Naples continue to be a desirable place to live.
For information contact: David Cobb @ 813-443-6504
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
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