Posted in Charlotte Market | Posted on 10-29-2013 | Written by Metrostudy News
(Charlotte, NC – October 29, 2013) Third quarter new housing data for Charlotte could not have been better. Most builders reported the recent uptick in interest rates had little negative effect on home sales, 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.
For the third quarter ending September 2013, Charlotte’s quarterly starts for all product types were 2,893, a substantial increase over last quarter’s 2,262. 3Q13 starts were 51.3% higher than the 1,912 quarterly starts from a year ago in 3Q12. Third quarter Closings totaled 2,652 new homes, 768 more than last quarter’s closings. Compared to one year ago, Charlotte’s 3Q13 closings increased by a dramatic 55.1%. “Our projected 2013 year end growth of new home starts appears to have been too conservative. Expectations are now that we will have a 30 to 40% increase in starts. Closings are expected to be up 25% over last year,” said Bill Miley, Regional Director of Metrostudy’s Charlotte market.
Total inventory of homes in all stages of construction (Model Homes + Finished Vacant + Under Construction) rose in the third quarter to 4,611 homes representing a 6.9-month supply. Housing Inventory months of supply decreased due to Charlotte’s strong quarterly closings even though total inventory increased. A 6-8 month supply of inventory is considered to be in equilibrium. The Finished Vacant Inventory supply has dropped to a low 1.6 months. We closed more homes than we were able to complete.
The total number of Vacant Developed Lots in the market at the end of 3Q13 continued to drop, now at 28,914. 2,893 lots were absorbed via new starts in the third quarter while only 1,900 new developed lots were added to our supply. Relative to lot absorption, the 28,914 Vacant Developed Lots in Charlotte represent a 39.4 month supply, having dropped from the 60-month supply at the end of last year. While still above the equilibrium threshold of a 24-28 month supply, there is a severe shortage of vacant lots in the closer in, more desirable locations.
“Rising home prices for new construction is guaranteed. The forces of supply and demand are real, however increasing labor costs, rising sticks and bricks cost, material shortages are also real. Let’s not forget that Vacant Developed Lot prices, development costs and vacant land are continuing to increase home costs constantly nibbling away at margins,” said Miley.
“Builders, lenders and developers must remember the ‘land lessons’ learned six to eight years ago. We need
lots, bellowed the builders. Developers responded by paying too much and going too far out. We were all guilty
of the ‘if you build it, they will come’ mentality. Builders bought them. Developers paid more and went farther
out until you had to pack a box lunch to get there. Then 2008 came. The rest is a painful history lesson.
Well, it is now 4Q13 and builders everywhere are saying; we need lots,” said Miley.
For information contact:
Bill Miley @ 704.650.7584
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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