Metrostudy Florida Markets: All Florida markets witnessed year-over-year price growth in 2Q14

Posted in Central Florida Market, Jacksonville Market, Naples - Ft. Myers Market, National Housing Market, Sarasota - Bradenton Market, South Florida Market, Tampa Market | Posted on 11-11-2014 | Written by Metrostudy News

FINAL 2Q Florida Release and Infographic_Page_01

 

Florida’s new-home market has been surprisingly resilient in coming out of the downturn. Despite massive numbers of foreclosure homes for sale all around the state, builders have managed to find increasing numbers of buyers, and starts activity has rebounded nicely. Prices moved up rapidly in 2011, 2012, and 2013, rising at a more moderate pace in 2014.

2q chart

 

 

Florida Market-by-Market

Tampa:

The Tampa market continues its slow recovery from the devastating recession. Home starts fell by 85% from the peak to the bottom. While some broad based indicators remain positive, like job growth and the local unemployment rate, they have not resulted in robust demand for new housing. As of mid-2014, the Tampa annual pace for new housing starts was 5,853 units.

While this was a 69% improvement from the 3,462 homes built in 2009, it represents just 26% of the peak starts (22,409 units for the twelve months ending March 31, 2006). Families that lost their homes by foreclosure, have difficulty in qualifying for a mortgage or can’t afford the rising new home prices have driven a greater portion of housing demand into rental apartments.

Tampa Closings Average Price $/SF
2Q13 1,510 $241,924 $102.29
3Q13 1,484 $251,058 $104.96
4Q13 1,642 $264,895 $107.68
1Q14 1,108 $272,419 $106.33
2Q14 1,304 $276,138 $106.82

 

Over the last year, single family detached home prices are up 12.7% for the five county Tampa market. Homes that closed during the second quarter of 2014 had an average price of $288,006 versus $255,491 in 2Q13. Not only are prices rising, but the average home size is growing. The 2Q closing records showed the average detached single-family home was 2,738 SF, up 227 SF over the 2Q13 average of 2,511 SF. During the second quarter of 2014, both home size and price were essentially flat.

We have seen prices also rise substantially over the last year in townhome and villa product. The average closing price in 2Q14 was $210,243 or 11.9% higher than the $187,881 average in
2Q13. Unlike the detached product, the average size of attached product is shrinking.

Tampa is a highly concentrated new home market as the Top 10 builders accounted for 60% of all annual housing starts in the second quarter of 2014. The list of top builders includes nine national builders and just one local builder. Lennar Homes dominates the list and built more homes than builders #2, 3 and 4 combined.

 

Tampa,
August 1, 2013 – July 31, 2014

Builder Closings
LennarHomes    1,100
DR Horton 409
Pulte Group 343
M/IHomes 314
TaylorMorrison 280
HomesbyWestBay 262
Standard Pacific Homes 235
BeazerHomes 213
Ryland Homes 189
K.Hovnanian 185
TOTAL 3,530

Sarasota:

The Sarasota market is less reliant upon job growth to create housing demand as the market has a strong reputation for retiree demand. That did not mean that Sarasota was immune to the recession. New home starts fell by 86% from 9,113 for the twelve months ending March 31, 2006 to 1,284 units built in 2009. Sarasota has recovered quicker than other Florida markets and as of June 30, 2014, the annual start pace was 3,839 homes (up 199% from the cyclical low).

As the recovery has taken hold, new home prices are rising. In fact, single-family detached homes sold for an average of $310,266 during 2Q14. This was a 22.5% increase over the $253,285 average price in 2Q13. A portion of the price increase was directly attributable to larger homes being bought. The average new home was 2,368 SF in 2Q14 versus 2,076 SF in 2Q13. Buyers are looking for a fourth bedroom or home office particularly in Manatee County.

Sarasota Closings Average Price $/SF
2Q13 707 $247,643 $123.57
3Q13 827 $259,779 $126.41
4Q13 937 $284,759 $131.04
1Q14 677 $248,670 $130.09
2Q14 637 $295,825 $130.49

 

For town-home and villa product, prices have not changed over the last twelve months. The average closing price in 2Q14 was $224,293 or just 0.9% higher than the $222,364 average in
2Q13. The data does show that the average size of attached product grew to 1,765 SF. For the prior four quarters the average product size was between 1,597 and 1,680 SF.

Sarasota is a very highly concentrated new home market as the Top 10 builders accounted for
72% of all annual housing starts in 2Q14. The list includes seven national builders and three local/regional builders. The list is led by Neal Communities with 627 recorded closings, over one and a half time larger than #2 Pulte Group.

 

Sarasota,
August 1,2013- July 31,2014

Builder Closings
Neal Communities 627
Pulte Group 401
LennarHomes 374
DR Horton 355
TaylorMorrison 349
Ryland Homes 211
WCI Communities 175
Medallion Homes 116
Maronda Homes 109
M/IHomes 72
TOTAL 2,789

 

Southwest Florida:

Southwest Florida’s housing market has recovered nicely from the depths of the Great Recession, and closings were up 31% in 2Q14 over 2Q13. In fact, Metrostudy ranked the Cape Coral Ft. Myers MSA third and the Naples – Marco Island MSA sixth in last month’s “Top Ten Outlook and Market Health Ranking.”

SW Florida Closings Average Price $/SF
2Q13 611 $384,869 $171.12
3Q13 725 $390,281 $177.32
4Q13 891 $429,191 $188.42
1Q14 728 $434,339 $185.36
2Q14 800 $428,685 $173.00

 

During this same period, the average sales price was up 11%, and the size of the home increased by 10%. In particular, Naples showed a significant jump in pricing and home size, with a $75,000 average increase in pricing, to an average of $543,307, and an over 400 square foot increase (19%) in home size, to an average of 2,744.

However, the price per square foot in Southwest Florida only increased 1% from 2Q13. This may be an anomaly for the current quarter, as price per square foot prices had risen from an average of $171/sf in 2Q13 to over $185/sf in 1Q14. Or, it may reflect a developing trend with builders offering larger homes to offset the increase in sales prices. Metrostudy will monitor this metric to see if a trend emerges one way or the other.

 

Cape Coral-Ft Myers, Naples-Imokalee-Marco Island,
August 1, 2013 – July 31, 2014

Builder Closings
Lennar 943
Pulte-DelWebb-Centex 401
DR Horton 374
Stockdevelopment LLC 355
WCI communities 349
Gl Homes 251
TaylorMorrison 175
Habitat for Humanity 116
Toll Brothers 109
MintoBuilders 72
TOTAL 3,145

 

The Treasure Coast:

As with Southwest Florida, the Treasure Coast has seen a big recovery from the lows of the market back in 2010, and closings are up 36% the second quarter this year over the 2Q13. Home prices are among the most affordable in South Florida. However, prices continue to rise, with the average up 16% to $294,131. The average size of the home increased from 2,285 to 2,443, a 7% jump. Pricing per square foot is the lowest of all three areas, and at only $120/sf, represents a true bargain for South Florida home shoppers. It’s still relatively easy to find a new single family detached home selling for under $200,000 on the Treasure Coast. Nevertheless, the price per square foot increased 8% during this period, so the trend is moving upward.

 

Treasure Coast Closings Average Price $/SF
2Q13 190 $253,921 $111.12
3Q13 223 $283,141 $115.23
4Q13 259 $294,108 $116.20
1Q14 208 $288,007 $116.22
2Q14 258 $294,131 $120.38

 

Sebastian-Vero Beach, Port St. Lucie,
August 1, 2013 – July 31, 2014

Builder                   Closings
DR Horton 280
KolterCommunities Florida LLC 199
AdamsHomes 126
AV Homes, Inc. 96
GHO Homes 82
Pulte-DelWebb-Centex 60
Maronda Homes 59
MintoBuilders 59
KB Homes 45
HabitatForHumanity 32
TOTAL 1,038

 

Miami- Ft. Lauderdale:
South Florida is the most populous area with approximately 6 million residents. The Miami – Ft. Lauderdale MSA also placed in our Top Ten Ranking at ninth overall.

Miami-Ft. Lauderdale Closings Average Price $/SF
2Q13 1,033 $296,665 $154.40
3Q13 1,256 $377,697 $147.25
4Q13 1,331 $417,954 $154.28
1Q14 988 $425,785 $161.90
2Q14 994 $469,107 $171.46

 

Somewhat surprisingly, the closing rate declined by 4% in the current quarter when compared to
2Q13. This is also reflected in the annualized starts rate, which declined in 2Q14 as well. We are seeing the effects of a slight tempering in demand due to the relatively high sales prices and supply constraints caused by lot and labor shortages, which are noticeable in all three of the MSA’s counties.

Those price increases are on par with Naples, with a similar $75,000 jump in the average sales price, to $469,107. The increase in home size was more modest, at only 7% to 2,736. However, the overall size is one of the largest home sizes in all of South Florida; quite similar to Naples. South Florida also saw the largest increase in price per square foot during this period, rising from
$154/sf to $171/sf, or 11%.

In summary, prices continue to rise, although at a more modest pace, particularly in the past couple of quarters. Homes are getting bigger again, and we are likely to set another record for new home size in 2014. While home appreciation is likely to continue, there’s always the concern that higher prices will crimp demand. Supply constraints, especially in South Florida, might mask a muting in demand, but the other two areas could feel the pinch should prices rise beyond what consumers deem as reasonable.

 

Miami-Fort Lauderdale-West Palm Beach,
August 1, 2013 – July 31, 2014

Builder              Closings
Lennar 1,450
Gl Homes 630
DR Horton 397
CC Devco Homes 316
Standard PacificHomes 304
Pulte-DelWebb-Centex 265
Encore Homebuilders 240
MintoBuilders 226
Toll Brothers 219
TerraGroup 143
  TOTAL       5,640  

 

Jacksonville:

The Jacksonville MSA’s new home average closing price has grown by almost $35,000, or 14% in the 2Q14 when compared to the second quarter of 2013. The price per square foot has grown by almost $8, or just over 7% during that same period.

Jacksonville Closings Average Price $/SF
2Q13 1,122 $249,530 $102.12
3Q13 1,143 $259,474 $103.23
4Q13 1,184 $255,260 $104.84
1Q14 1,165 $272,197 $106.74
2Q14 1,297 $284,114 $109.67

 

Even with this pricing growth the market’s quarterly closing rate increased by over 15% in 2Q14 when compared to 2Q13. New home starts (not shown here) have been flat over the past 6 quarters. Starts grew from under 600 units in the 4Q11, to 1,400 units in 2Q13, but have stayed between 1,300 and 1,400 units per quarter since.

This indicates the market has reached a point where pricing growth has curbed demand. With the strongest market areas being in northern St. Johns County, it is likely the demand for lower priced housing will push demand out of the urban core. We expect to see stronger growth in new housing construction further south in St. Johns county, as well as in Clay and northern and western Duval County over the coming quarters.

 

Jacksonville,
August 1, 2013 – July 31, 2014

Builder             Closings
DR Horton 1,046
DreamFindersHomes LLC (Fl) 384
Lennar 373
Pulte-DelWebb-Centex 317
Kb Home 292
Richmond AmericanHomes-MDC 281
Mattamy Homes 251
DavidWeekleyHomes 245
Standard PacificHomes 152
Providence Homes(Fl) 146
TOTAL 3,236

 

Orlando:

The Orlando MSA’s new home average closing price has grown by almost $40,000, or 15% in the 2Q14 when compared to the 2Q13. The price per square foot has grown by almost $8, or just over 7% during that same period.

Orlando Closings Average Price $/SF
2Q13 1,855 $259,978 $109.05
3Q13 1,949 $274,837 $110.84
4Q13 2,088 $290,887 $112.50
1Q14 1,699 $290,197 $112.53
2Q14 1,757 $299,460 $116.71

 

Not surprisingly, the market has felt this pricing pressure as the quarterly closing rate declined by
5% in the second quarter of 2014 when compared to 2Q13. New home starts (not shown here) have been flat over the past 6 quarters. Starts grew from under 1,000 units in the 2Q11, to 2,400 units in 2Q13, but have stayed in the mid-2,000 range since.

What this ultimately means is that demand will be reduced in the urban core, and increase in the outlying areas as buyers look to find, and builders work to produce more affordable product. Orlando has a mix of buyers with significant international and active adult markets, yet remains primarily a Leisure and Resort Service and Retail Trade job market, catering to first time, first time move-up and multi-generational home buyers.

 

Orlando,
August 1, 2013 – July 31, 2014

Builder               Closings
Lennar 922
DR Horton 852
Meritage Homes 581
TheRyland Group,Inc. 484
Kb Home 416
M/IHomes 352
BeazerHomes 341
Pulte-DelWebb-Centex 299
TaylorMorrison 299
Standard PacificHomes 287
TOTAL 4,833

 

Florida is not just one market, clearly. Activity levels and pricing power vary from one market to the next, but the entire state is set for growing demand over the next five years. From the Millennials to the Boomers, an even greater influx of residents is coming to the state. Demand from retirees is expected to be a palpable force as 10 million more people reach retirement age in the U.S. over the next 5 years. Generation Y is so far showing a tendency to rent, but that will start to change as more of them start families.

For information contact:
Danielle Fiore
813-443-6504
dfiore@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, LLC 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.

 

Lots of Catch-Up

Posted in Atlanta Market, Austin Market, Central Florida Market, Dallas - Ft. Worth Market, Denver - Colorado Springs Market, Houston Market, Inland Empire Market, Jacksonville Market, Las Vegas Market, Maryland Market, Naples - Ft. Myers Market, National Housing Market, Northern Virginia Market, Phoenix - Tucson Market, Raleigh - Durham Market, Sarasota - Bradenton Market, South Florida Market, Southern California Market, St. George - Mesquite Market, Tampa Market | Posted on 08-04-2014 | Written by Brad Hunter

brad hWe have been talking for years about the lot shortages that builders are facing.  Now, it’s time to talk about how many lots are being developed.  Builders and developers are now playing “catch-up,” with builders buying land and lots and developers/investors paving roads and putting in infrastructure to serve the builders’ needs at a frenetic pace.

The pace of lot delivery (completion, ready for the builder) has gone up 140% in the past two years, much faster than the pace of housing production has risen (+84%).  Despite this increased pace, lot development STILL lags the pace of home production nationwide.

bb

 

In some markets, the lot production machine is in full gear, and has caught up with demand.  This is a good sign for builders, and a vital turning point for home production in 2015 and beyond.

The TOP TEN states for lot production in 2Q14 are:

State       2nd Q.   Starts        2nd Q. Lot       Deliveries
Texas 19,714 18,931
Florida 12,416 10,974
California 10,050 10,219
North Carolina 4,866 3,168
Georgia 4,489 1,270
Colorado 3,985 3,276
Arizona 3,519 4,596
Maryland 2,436 2,122
Utah 2,328 2,498
Virginia 2,198 1,850

Note that lot production has caught up with new home production in California, Arizona, and Utah.   Florida development is woefully far behind demand for lots, hence the skyrocketing cost of finished lots there.

Metrostudy defines “future lots” as those that are in the pipeline (some are pre-entitlement), and Florida has the deepest pipeline.   Below are the top 10 states ranked by known future lots.

State Future Inventory
Florida 1,597,055
California 1,378,299
Arizona 1,213,476
Texas 651,413
Colorado 406,613
Georgia 316,956
Illinois 281,054
Nevada 227,121
Maryland 194,829
Virginia 183,613

 

Is Activity in the South…Going South?

Posted in Atlanta Market, Central Florida Market, Charlotte Market, Dallas - Ft. Worth Market, Houston Market, Jacksonville Market, Naples - Ft. Myers Market, National Housing Market, Northern Virginia Market, Raleigh - Durham Market, Rio Grande Valley Market, San Antonio Market, Sarasota - Bradenton Market, Suburban Maryland Market, Tampa Market, The Triad Market | Posted on 08-04-2014 | Written by Brad Hunter

The brad hgovernment release on housing starts for June showed a sharp decline, concentrated in what the Census Bureau defines as “The South.”  Single-family starts were down in June by 9.0% from the previous month, and down 4.3% from twelve months earlier.  Within that number, almost all the decline was in the South, down 20.1% versus the previous month and down 14.5% versus a year ago.

Rumors of the South’s demise are greatly exaggerated.

Read Full Article and See Quarterly SFD Starts

 

 

 

 

Harry Potter Casts a Spell on Florida’s Economy

Posted in Central Florida Market, In The News, Jacksonville Market, Naples - Ft. Myers Market, Sarasota - Bradenton Market, South Florida Market, Tampa Market | Posted on 06-20-2014 | Written by Metrostudy News

anthony cJune 5 (Bloomberg) –Florida’s employment picture has improved faster than any other state since the financial crisis — and some Floridians says that’s because Harry Potter has been working his wizardry in their state.

Bloomberg’s Yang Yang reports from Orlando.

See full interview here

Metrostudy Regional Director – Anthony Crocco

Building the Case for Active Adult on the Treasure Coast

Posted in Central Florida Market, Naples - Ft. Myers Market, National Housing Market, South Florida Market | Posted on 05-08-2014 | Written by David Cobb

There’s always a discussion when an active adult oriented community is planned as to whether it should be age restricted (55+ only) or age targeted. One argument holds that an age restricted community is still preferred by older buyers, who simply don’t want children permanently in their neighborhood. This will attract enough buyers to meet the absorptions expected by the builder, so the argument goes. The other argument is that with careful planning of the community and the right product, you’ll get buyers of all ages, including the active adult purchaser. Both are probably winning strategies as there are many success stories of each type, but there’s no question that the age-restricted active adult community is still popular. Read the rest of this entry »

Central Florida Housing Market Metrostudy 1Q14 Survey Results: Starts 2014 Strong; Rising Prices will Drive Demand in Suburban Markets

Posted in Central Florida Market | Posted on 05-07-2014 | Written by Metrostudy News

May 7, 2014: Metrostudy’s 1Q14 survey of the housing market in the Orlando region shows impressive strength across the board, with some areas poised for exceptional growth in 2014. In the Orlando region (Lake, Orange, Osceola, and Seminole counties), 2,416 single-family housing units were started in the first quarter of 2014. This represents an increase of 23.5% compared to last year’s quarterly starts rate of 1,956 units.

The annual starts rate of 9,507 units has increased by 34.7% over the past year. Single-family quarterly closings totaled 2,188 units which is 36.4% higher than the 1,604 closings that occurred in the same quarter last year. The annual closings rate (past 4 quarters) of 8,457 units is 34.8% above the rate of 6,275 units per year recorded a year ago.

“We have started to see growth spurts in parts of Lake and Osceola County,” says Anthony Crocco, Regional Director of Metrostudy’s Orlando/Jacksonville area. “As pricing growth continues in Orange County, we anticipate more new subdivision offerings further out of the urban core. Builders are working hard to replace sold out subdivisions, although the pricing of newly developed lots will continue to push up asking prices and slowly drive more demand into the suburban market areas.”

Starts and closings in the Orlando MSA were up significantly in the first quarter from last quarter and from a year ago. The fourth quarter slowdown was due more to seasonality than market conditions, and we expect construction activity to continue to grow thru the next two quarters.

The top three market areas and sub-markets based on annual starts are shown below.

Market Area Annual Starts (% Chg)

Orange ………………………. 4,652 (+25.8%)

Osceola……………………… 2,229 (+61.2%)

Lake………………………….. 1,732 (+55.6%)

Sub-Market Annual Starts (% Chg)

SW Orange ………………… 1,620 (+46.5%)

South Orange …………….. 1,356 (+30.3%)

Clermont/South Lake….. 1,157 (+42.0%)

The Orlando market’s employment growth continues in Leisure and Resort Services, Professional and Business Services, and Education and Health Services. A more recent phenomenon has been strong growth in Construction Services. As housing production continues to grow in SW and SE Orange County, and Osceola and Lake Counties, the construction engine will help support growth in the other categories.

The new home market is growing throughout the MSA, with the strongest absorption and significant pricing growth in the Orange County “A” submarkets of SW Orange, South Orange, and Clermont/South Lake. “We expect continued growth in construction activity in the area, although growth will likely flatten in the best locations as pricing increases slow demand,” says Crocco.

For information contact: anthony crocco @ 407.875.9090 x820
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.

Orlando’s new housing growth continues, but at a slower pace

Posted in Central Florida Market | Posted on 02-20-2014 | Written by Metrostudy News

(Orlando, FL – February 20, 2014) New housing production in the Orlando area slowed in the 4th quarter, but remains strong as sales backlogs still exist at virtually all production builders. This is according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

In the Orlando MSA (Lake, Orange, Osceola, and Seminole counties), 1,806 single-family housing units were started in 4Q13. This represents an increase of 5.2% compared to the quarterly starts rate of 1,716 units in 4Q12. Single-family quarterly closings totaled 1,863 units, which is 10.0% higher than the 1,694 closings that occurred in the same quarter last year. “Starts and closings in the Orlando MSA were down this quarter from the third quarter, but still up from a year ago. The slowdown this quarter can be attributed in large part to seasonality, as most builders are still reporting significant sales backlogs,” said Anthony Crocco, Regional Director of the Metrostudy’s Orlando Market

Total single-family inventory, which is comprised of units under construction, finished vacant units and models, equaled 4,791 units at the end of the fourth quarter, representing 7.5 months of supply. Housing inventory increased by 32.1% compared to last year. “The number of units in housing inventory was virtually unchanged from last quarter, with a few more houses finished and vacant this quarter than last. Still, most completed houses are being occupied very soon after completion,” said Crocco.

This quarter, 2,036 lots were delivered to the Orlando MSA versus 1,713 lots a year ago. Vacant developed lot inventory stands at 26,871 lots, a decrease of 10.4% compared to 29,997 lots last year. Based upon the annual starts rate, this lot inventory represents 36.3 months-of-supply, a decrease of 19.7 months from last year. “Vacant lot inventory ratios have been generally declining, but rose a bit in 4Q13. The annual starts rate also rose only slightly, which has left the months of supply level unchanged from last quarter. While there are still over 3 years of lots remaining in the MSA, key submarkets are in need of additional lots,” said Crocco.

“We expect growth in new home construction activity to slow in the best locations, as pricing increases and lack of lot availability will impact demand and supply there. Builders are beginning to reach out with more conviction into the “C” and even “D” locations in order to find lots with pricing that will enable home sales to first time and first time move–up homebuyers. This trend is only going to accelerate as infill pricing increases at a faster rate than the overall market,” said Crocco.

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, LLC 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.

The Orlando housing market maintains strong growth, Annual starts up 49.7%

Posted in Central Florida Market | Posted on 11-12-2013 | Written by Metrostudy News

(Orlando, FL – November 12, 2013) The new home market is growing throughout the Orlando MSA, with strongest absorption and pricing growth in the Orange County “A” submarkets. This is according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

In the Orlando MSA (Lake, Orange, Osceola, and Seminole counties), 2,743 single-family housing units were started in 3Q13. This represents an increase of 51.9% compared to last year’s quarterly starts rate of 1,806 units. The annual starts rate of 8,764 units is up by 49.7% year-over-year.

Single-family quarterly closings totaled 2,295 units, 50.2% more than the 1,528 closings that occurred in the same quarter last year. The annual closings rate (past 4 quarters) of 7,502 units is 41.3% above the rate of 5,308 units per year recorded a year ago. “The third quarter of 2013 continued the trend of strong starts and closings in Orlando. Both quarterly rates are well above last quarter and last year. We expect the starts rate to moderate this quarter, as most builders will be focusing on closing sold units before year end,” said Anthony Crocco, Regional Director of  Metrostudy’s Orlando Market.

Total single-family inventory, which is comprised of units under construction, finished vacant units, and models, equaled 4,843 units at the end of 3Q13, for 7.7 months-of-supply. Overall, total inventory increased by 35.2% year-over-year. Under construction housing inventory rose by 1,113 units to 3,113 units over the past year. Finished vacant inventory increased from 1,265 units to 1,407 year-over-year. Model home inventory is up 7 units year-over-year, to 323 models.

In the third quarter, 1,273 lots were delivered to the Orlando MSA, versus 683 lots a year ago. Vacant developed lot inventory stands at 26,870 lots, a decrease of 13.0% from 30,901 lots a year ago. Based upon the annual starts rate, this lot inventory represents 36.8 months-of-supply, a decrease from the 63.3 months-of-supply one year ago. The number of units of total housing inventory has increased recently, primarily due to the large increase in units under construction. “Completed houses are being occupied as quickly as they are finished. Most of the under construction inventory is likely sold and we do not expect the finished supply to increase significantly over the next few quarters, as closings should remain strong,” said Crocco.

“We expect growth in construction activity to slow in the some of the best locations as pricing and interest rate increases will slow demand. This should help builders work thru sales backlogs while trying to contain costs,” said Crocco.

About Metrostudy

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

About Hanley Wood

Hanley Wood, LLC is the premier 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.

Orlando Housing Market Growth Mostly Organic…So Far

Posted in Central Florida Market | Posted on 11-11-2013 | Written by Anthony Crocco

Orlando has a history of leading the rebounds from housing market downturns, and this recovery was no different. Strong growth in the theme park industry early in the recovery period (mid-late 2010, with special thanks to Universal Studios and a new section about a wizardly boy’s world) helped new construction grow in 2010 and 2011 faster than most U.S. markets.  That trend accelerated in the third quarter of 2013, as Orlando’s new single family home construction activity was up almost 15% compared to the previous quarter.  This is much stronger than the nation (which was down slightly) and most Florida markets.

Pricing growth is also accelerating as land/lots, labor, materials and administrative overhead costs grow to meet the increasing demand.  To some in the local industry, it is reminiscent of 2005-2006.  For a number of reasons, we believe this growth is more organic and won’t skew the market, at least not yet.

First, after the boom we had a 2-3 year period of very low construction.  And while the past 2-3 years have recorded good growth, total activity (current rate of 8,000 annual new single family starts) is still below Orlando’s historical “normal” trend for new construction of 10,000-12,000 units. There was and still is pent up demand for new homes from local, working buyers. Although the growth in international and investment new home buyers should be recognized.

Secondly, the labor and materials markets are not at the same stress levels as they were from mid-late 2004 thru the end of the boom.  The state of Florida in particular, and many areas in the southeast experienced significant hurricanes in 2004 and 2005, which tightened the labor and materials markets and contributed a new wave of buyers due to strong job growth.

Then, as the boom accelerated, home financing became a no risk proposition. With prices rising fast and homes being sold multiple times between signing the contract and the closing (flipping), it was easy for almost anyone to speculate on real estate.  Many people did.

Finally, before the bust, there was significantly more home equity in most northern markets that feed Florida’s housing growth.  While resale activity rates have recovered in most areas, pricing is still low compared to the peak or near peak values. There is likely additional waves of pent up demand that will blossom from feeder markets as values continue to recover.

So while we can’t say there is no speculation going on in the Orlando new home market, we do believe much of the growth that is occurring is natural (organic) and not bad for the industry. It is good to remain cautious however, as eventually, the slow rate of job formations will not be able to sustain the level of housing activity the Orlando market is accustomed to producing.