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.

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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.

The Orlando housing market maintains strong growth in the second quarter of 2013

Posted in Central Florida Market | Posted on 09-09-2013 | Written by Metrostudy News

(Orlando, FL – September 9, 2013) While housing activity is heating up everywhere, Orlando’s new home activity continues to increase at one of the strongest rates in the U.S. 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), 2,378 single-family housing units were started in the second quarter of 2013. This represents an increase of 59.5% compared to last year’s quarterly starts rate of 1,491 units. The annual starts rate of 7,796 units has increased by 50.2% over the past year. Single-family quarterly closings totaled 1,918 units which is 32.0% higher than the 1,453 closings that occurred in the same quarter last year. The annual closings rate (past 4 quarters) of 6,621 units is 37.4% above the rate of 4,819 units per year recorded a year ago. “We anticipate starts and closing rates to continue to grow in the coming quarters, as most builders still have a significant backlog of sales contracts,” said Anthony Crocco, Regional Director of the Metrostudy’s Orlando and Jacksonville Markets.

Total single-family inventory, which is comprised of units under construction, finished vacant units and models, equaled 4,477 units at the end of the second quarter, 8.1 months of supply. Housing inventory increased by 35.6% compared to last year, Under construction housing inventory rose by 1,183 units to 2,838 units over the past year. Finished vacant inventory decreased from 1,317 units last year to 1,307 this year. Model home inventory is up 2 units from last year to 332 total models. Builders in this market are closing 19.9 homes per year per model, significantly better than the 14.6 homes closed per model last year.  “The number of units in housing inventory has increased recently, but primarily in under construction units. Completed houses are being occupied as soon as the house is finished. Much of the under construction 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.

This quarter, 638 lots were delivered to the Orlando MSA versus 234 lots a year ago. Vacant developed lot inventory stands at 28,204 lots, a decrease of 12.3% compared to 32,161 lots last year. Based upon the annual starts rate, this lot inventory represents 43.4 months of supply, a decrease of 30.9 months from last year. Vacant lot inventories are declining and the increase in annual starts caused the months of supply ratio to drop significantly this quarter. “There is less than 4 years of lots remaining in the MSA, which is a significant improvement from over 9 years of lots just 7 quarters ago,” said Crocco.

In the Orlando MSA, the number of employed increased by 1.6%, or 16,800 workers over the 12 months through May 2013, to 1,058,100. The Leisure and Hospitality sector led job formations with 8,500 jobs added in the past 12 months, a growth rate of 4.0%. Education and Health (4,000 or 3.1%), and Trade, Transportation, & Utilities (4,200 or 2.1%) saw significant gains over the past year. The construction sector lost 1,100 jobs over the past year, or 2.5%, from May of 2012 and 2013. No other sectors added or lost 1,000 or more jobs over the past year,” said Anthony Crocco, Regional Director of the Metrostudy’s Orlando and Jacksonville Markets.

Our forecast is for strong activity through year end, at least, with builders working to hang on to margins in an environment of cost increases. At the same time, builders are looking hard at lot and land positions to secure the future lots needed to grow their respective businesses,” said 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, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

The Orlando housing market experienced strong growth in the first quarter

Posted in Central Florida Market | Posted on 05-06-2013 | Written by Metrostudy News

(Orlando, FL –May 6, 2013) The Orlando housing market shows growth despite flat job numbers. 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, the number of employed increased by 2.0%, or 20,500 workers over the 12 months through February 2013, to 1,051,400. The Leisure and Hospitality sector led job formations with 10,200 jobs added in the past 12 months, a growth rate of 4.9%. Professional & Business Services (2,900 jobs or 1.7%), Education and Health (5,300 or 4.2%), and Trade, Transportation, & Utilities (3,500 or 1.8%) all saw significant gains over the past year. “Most remaining sectors were virtually flat between February of 2012 and 2013, with no sectors adding or losing 1,000 or more jobs,” said Anthony Crocco, Regional Director of the Metrostudy’s Orlando and Jacksonville Markets.

In the Orlando MSA, 1,801 single-family housing units were started in the first quarter of 2013. This represents an increase of 29.9% compared to last year’s quarterly starts rate of 1,386 units. The annual starts rate of 6,767 units has increased by 46.3% over the past year. Single-family quarterly closings totaled 1,505 units which is 21.6% higher than the 1,238 closings that occurred in the same quarter last year. The annual closings rate (past 4 quarters) of 6,084 units is 37.3% above the rate of 4,432 units per year recorded a year ago. “The first quarter of 2013 continued the trend of strong starts and closings in Orlando. Both quarterly rates are well above last year, although closings fell slightly from 4Q. We anticipate starts and closing rates to accelerate in the next two quarters, as most builders have a significant backlog of sales contracts waiting to start construction,” said Crocco.

Total single-family inventory, which is comprised of units under construction, finished vacant units and models, equaled 3,945 units at the end of the first quarter, 7.8 months of supply. Housing inventory increased by 20.9% compared to last year,. Under construction housing inventory rose by 758 units to 2,279 units over the past year. Finished vacant inventory decreased from 1,413 units last year to 1,345 this year. Model home inventory is down 7 units from last year to 321 total models. “Builders in this market are closing 19.0 homes per year per model, significantly better than the 13.5 homes closed per model last year,” said Crocco. “The number of units in housing inventory has increased recently, but primarily in under construction units. Completed houses are being occupied as soon as the house is finished,” said Crocco.

This quarter, 858 lots were delivered to the Orlando MSA versus 466 lots a year ago. Vacant developed lot inventory stands at 30,074 lots, a decrease of 10.1% compared to 33,447 lots last year. Based upon the annual starts rate, this lot inventory represents 53.3 months of supply, a decrease of 33.4 months from last year.

“We expect growth in construction activity to slow in the best locations, as increases in base pricing slow demand. This will help builders work thru sales backlogs while trying to maintain profitability with rising costs,” said 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, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.