Metrostudy’s Brad Hunter Says 5.5% Rates Still A Year Off

Posted in Economy, National Housing Market | Posted on 12-27-2013 | Written by Brad Hunter

This link is to an interview on Bloomberg Radio, conducted just after the latest New Home Sales number was released by the Census Bureau.  In this interview, I immediately express skepticism about the government’s number.

After the interview, I reflected on the way in which the stock market moves based upon that number.  The huge spike in sales in October is completely at odds with that we are hearing from the leadership in the homebuilding industry nationwide, and from our weekly survey information.  Part of the problem is that the government number ignores cancellations.

Despite the flimsiness of this statistical series, it moves the markets.  Because it is a topic that clearly carries a lot of importance, I try each month to inject some additional information, some perspective, and some better data into the discussion, so that people aren’t misled.

See The Interview Here (scroll down and find the audio from December 24th – Metrostudy’s Brad Hunter Says 5.5% Rate Still A Year Off)

Why Home Builder Stocks Are Falling – Brad Hunter on CNBC

Posted in Economy, National Housing Market | Posted on 06-24-2013 | Written by Metrostudy News


brad hBrad Hunter discusses the effects of rising mortgage rates on the housing market and homebuilder stock prices.

See Full Video Here

Housing Starts: Back over 1 Million!

Posted in Economy, In The News, National Housing Market | Posted on 04-16-2013 | Written by Brad Hunter

Today’s housing report from the Commerce Department show that the pace of U.S. housing starts is back again over One Million per year.  That is a simple milestone for those that monitor the new home construction market, conveying in an easy-to-understand way that the housing market is finally doing more than crawling out of its grave.  Housing is no longer dormant, and this theme will resonate broadly across the U.S. economic and cultural landscape.

The positive psychological effect of surpassing that attention-getting number may be support greater confidence among homebuyers.  Potential homebuyers (or sellers) are receiving more and more data that reinforces their belief that housing is recovering, and that belief will translate into more confidence in their decision to buy a home.

We do know however, that a great deal of the surge in construction has been in the multifamily arena, where a massive apartment boom is taking shape.  Multifamily construction drove the entire housing starts number higher, and is now running at more than 400,000 a year!  The multifamily ratio is the highest it’s been since the 1980s, during that decade’s apartment construction boom.

Single family housing starts fell in March according to the government release, but are up 28.7% nationwide versus a year ago (comparing March 2013 with the same month a year ago).

A ‘flash’ look at Metrostudy’s data, due out in full next week, show some extremely strong numbers for the first quarter.  Charlotte, North Carolina starts, just in, are up 35.7% as of 1Q 2013, compared with 1Q 2012.

Some of the markets that fell the hardest during the downturn are rebounding the strongest:  South Florida single-family starts rose 61.2% in 1Q13, compared with 1Q12.  Las Vegas single-family detached housing starts are up 69% versus 1Q12.  Tampa starts rose 48.3%, for the second-highest pace in five years.  Sarasota starts rose 70.5%.

The increases in home construction reflect bona-fide increases in demand, driven by the re-emergence of folks who had hunkered down, taken on roommates, or moved back in with parents.  The renewed strength that is being observed in markets all across the country, even those that got humbled a few years ago, is impressive, and attention-getting, to the lay observer and the expert alike.

Shopping, Shipping, and Shifting Hubs

Posted in Economy, National Housing Market, Northern Virginia Market, Suburban Maryland Market | Posted on 04-08-2013 | Written by Metrostudy News

I love the fact that I can purchase just about anything I want, anywhere, at any time with a few simple touches to the screen on my phone.  My order is delivered to my home in no time, and delivery time continues to grow shorter as companies like Amazon rely on bigger regional distribution centers.  I started thinking about this retail magic and how meli1the changes to our global supply chains, and those yet to come, will shape how we live and work.  On one of my recent trips to Baltimore, I was reminded of a potential game changer – Panamax.

Sometime in 2015, the $5.25 billion widening of the Panama Canal will be complete and a new class of super ships will be able to pass.  The Port of Baltimore is poised to accept these 1,200’ long, post-Panamax ships, capable of carrying three times more cargo than the traditional ship.  The port is now home to four, 400-foot-tall cranes, the largest of their kind in the maritime industry. These cranes can reach 22 containers across on a container ship and lift 187,300 pounds of cargo.  Even though the ships won’t arrive for some time, operators of the ships are planning which ports they will ship to and Baltimore stands ready to compete with its 50-foot channel and new cranes. Read the rest of this entry »

Metrostudy Housing Industry Market Sentiment Survey – 2Q 2013

Posted in Economy, National Housing Market | Posted on 04-05-2013 | Written by Metrostudy News



Invitation to Participate in the

2Q 13 Market Sentiment Survey

As part of our ongoing housing market research, we are conducting our quarterly Housing Market Sentiment survey.

Metrostudy is a real estate market research and consulting company offering specialized services to local and national homebuilders, developers, and lenders in the new home construction industry.

Metrostudy provides local market analysis services throughout the United States and has been gathering and analyzing real estate market research information since 1974.

Please click on the link below, and in less than three minutes complete Metrostudy’s Market Sentiment Survey.


Metrostudy has been conducting a quarterly market sentiment survey for just under 10 years. The purpose of the survey is to assess the general and specific sentiment of key segments of the homebuilding industry. The survey is sent to approximately 18,000 participants in the homebuilding industry: builders, lenders, brokers and developers. On average, Metrostudy has enjoyed a 4 to 5% response rate from those sent the survey


Phone: 800-22-STUDY, 110


Houston Housing Market 2013 – The Way I See It

Posted in Economy, Houston Condo Market, Houston Market, In The News, National Housing Market | Posted on 01-11-2013 | Written by Mike Inselmann

Houston Housing Outlook 2013

Greater Houston Builders Association Presentation

By: Mike Inselmann, Founder and Former President of Metrostudy

The outlook for housing, and indeed most types of real estate, is very bright indeed as the New Year begins to evolve.  After a long, anxious, and scary, recession market conditions are exceedingly favorable for all types of housing sectors in Houston.

The National Economy is showing signs of a steady, but unexceptional recovery pace assisted, ironically, by a burgeoning increase in new home construction (and all the jobs and materials needed in support of home building).  The mortgage industry misbehavior in the middle of the last decade triggered a housing downturn that pulled almost every sector of the US economy into the morass of all too familiar since 2008.  Now housing is poised to play a significant role in the recovery of the next few years.  The end of the recession, expansion of job growth, the welcome end to the election season and all the negative rhetoric has improved the spirits of consumers.  Spending on consumer goods, autos, and now housing is having a positive effect on the economy.

Houston is at the top of almost every list relating to housing and real estate.  The downturn in Texas and Houston was not as severe as most of the ‘crisis’ markets around the country, and the upturn began sooner and is likely to be more sustainable due to the inordinate share of job growth being created in Texas and Houston.

The Houston economy moved from the recovery phase in November 2011, when the local job market regained all the jobs lost in the recession, and began building an ever larger employment base that has now reached roughly 2.8 million workers (double the job base at the end of 1982).  Houston will show an additional 95,000 jobs since that point in November 2011 once the final 2012 figures are tabulated.   Jobs are the principal driver of demand of demand for all goods and services;  jobs create households and household growth is the demand for additional housing, both for purchase and for rental.

The robust job recovery, thanks mostly to the expansion of the energy sector in the past few years, has created enough households to absorb all of the excess housing in Houston for single family homes, rental homes, during the second half of 2012.  Home prices are rising, apartment rents are the highest in history, and builders of both new single family homes and rental apartments are ramping up construction to try to match this new demand.  Consumers of housing in the next six months will come to realize that the window of opportunity to lock in a ‘deal’ on a new place to live has closed.

Prices will most certainly continue to rise because of the mismatch between supply and demand alone, but cost increases will also play a major role in housing price increases.   A dearth of buildable lots has home builders scrambling to find places to build homes and lot costs are increasing too.  Apartment builders are paying dearly for well located sites near or within Loop 610 as well.  Furthermore the surge in construction in the past year caught the supply chain flat footed as the supply of concrete, building materials and labor are challenging the industry to raise prices to cover the increased costs.  It is quite possible that the demand for housing will remain stronger than the builders’ ability to deliver units for much of the coming year.

Single Family Resale homes listed in MLS at the end of December amounted to a 3.7 month supply the lowest in 12 years.  Sales of pre-owned Single Family homes listed in MLS have risen 24% since June of 2011 even as the number of listings has declined.  During that same period demand for new Single Family homes has risen 39 %.  So, sales are increasing, supply is shrinking and prices for both for sale housing and rental apartments are on the rise.

In the past 15 years demand for new single family homes has averaged 30,000 per year, compared to an average of 22,000 over the past 30 years.  Metrostudy calculates the sustainable demand for new single family homes to be approximately 32,000 new homes per year based on job growth and population forecasts for the Houston Region.   In 2012 builders started 23,500 so there is room to grow before reaching that projected demand.   But some hurdles remain that make it difficult to reach that level very soon.  First is the previously mentioned short supply of lots, materials and labor to build homes.  But, mortgage underwriting standards remain restrictive, and many transactions for new and existing homes that do sell are subject to an ongoing disagreement over appraised values.  Furthermore, demonstrated demand from first time buyers has been severely restricted by credit issues and underwriting restrictions.  It is unclear whether the local market can reach the 32,000 annual units of demand without some contribution from first time and low to moderate income buyers.  But it will come, and in the meantime home builders will likely start construction on between 26,500 and 27,500 new homes in 2013, an additional 13-17% increase in the coming year.  That is, if production can keep up with demand.

Development Impact Fees…or some might say…Bureaucratic Taxation

Posted in Economy, National Housing Market | Posted on 11-15-2012 | Written by Bill Miley

Let’s begin by defining impact fees. They are a flat dollar fee (tax) charged to a developer for a new development (per lot or home, regardless of sales price) for the services or facilities the new development requires from the government. While the fee ends up being charged to the builder in the lot price, it is included in the cost of the new development and ultimately paid for by the homebuyer. Common terms used to refer to impact fees include “capacity fees,” “facility fees,” “system development charges”, “capital recovery fees,” and my favorite from the politically correct crowd, “adequate public facilities ordinance,” or AFPO, which are primarily designed to pay for new schools as the population grows. Like so many government programs that begin as a sensible and reasonable concept, they evolve quickly and quietly into revenue producing destructive programs loved by city planners and elected officials. They have the power to strong-arm developers into “offering” impact fees in order to get official blessings on new residential subdivisions, especially when no one with integrity could claim with a straight face that the “offer” might in some circles be considered “grease for the deal”. Unchecked power breeds arrogance. Some city council elected officials, fearful of mentioning raising property taxes simply create rules and ordinances to circumvent years of poor planning, maintenance and wasteful spending. After all, what’s wrong with imposing ‘pay to play’ requirements on developers? Shouldn’t they bear the burden for new growth (i.e. new home buyers) Read the rest of this entry »

JOBS, JOBS, JOBS…Why Housing will soon be a leader for job formation in this country

Posted in Economy, National Housing Market | Posted on 11-14-2012 | Written by J.W. Colvin IV

As we are all very aware, housing has been taking it on the chin for several years now. Lower demand for new homes caused by myriad reasons drastically reduced the production of new homes in this country. No aspect of the industry was left unscathed;not the hammer and nails folks, or the back office members of home builders, developers and lenders.  The entire industry suffered severe cutbacks.

Along with the cost cutting process of letting team members go, most of the home building industry participants did whatever else they could to stay in business. In many cases, this meant giving up margins to keep the lights on.

Now that the industry has realized increased demand and a general stabilization of the market place, industry participants are “getting whole.” In other words they are raising the prices of their goods and services. This has not translated into significant job gains…yet.

Labor shortages on the ground and in the office are now becoming a problem, because those who want to grab as much demand as possible simply don’t have the capacity to do so, because they don’t have the staff.

As the housing recovery gains steam, these positions will have to be filled and job gains will begin to appear in the sectors of the economy that have not yet recovered to Pre-2008 levels. Housing may have not been the first sector of the economy to show growth again, but it certainly will be a solid contributor as production continues to grow.

Metrostudy 3Q 2012 Executive Market Briefing

Posted in Economy, Houston Condo Market, Houston Market | Posted on 10-28-2012 | Written by David Jarvis

New home starts are way up. Annual starts are the highest since the end of 2008.  However, lot development continues to lag absorption.  Today’s lot inventory is the lowest since 2003, but the market finally delivered 5,000 badly needed lots. Join us at our 3Q-2012 Executive Briefing where we will discuss how these factors are affecting Houston’s new home sales and the outlook for the remainder of the year.

Where: Lakeside Country Club: 100 Wilcrest Drive Houston, TX 77042
Phone: 281- 582-0825

Date: Wednesday, November 7, 2012

Time: Registration: 8:00 a.m.  & Presentation: 8:45-10:00 a.m.

Note: This meeting is limited to Subscriber Clients and their employees only.

If you have any questions regarding this event, please contact:
Mike Inselmann:
David Jarvis:
Candy Winter:

The Presidential debate, fact checks and housing starts…How do we know what is true?

Posted in Dallas - Ft. Worth Market, Economy, National Housing Market | Posted on 10-26-2012 | Written by David Brown

Did you watch the second Presidential debate last week? President Barack Obama and Mitt Romney aggressively questioned the accuracy of the other candidate’s statements numerous times. With fingers pointing, at times it looked like a physical fight might break out. Candy Crowley, the moderator, even engaged in the debate, backing up President Obama’s claim about a statement he made in the Rose Garden. So who was right? Were each candidate’s statements accurate? As has become the norm, almost immediately after the debate and over the next day news agencies came out with numerous fact checks. Were the candidates accurately representing the facts? Voters want to know because they are facing an important decision in November.

On Wednesday, the U.S. Census Bureau and U.S. Department of Housing and Urban Development issued their joint monthly news release on residential construction. The report stated, “Single-family housing starts in September were at a rate of 603,000; this is 11.0 percent (+-11.1%)* above the revised August figure of 543,000.” Investors reacted, sending homebuilders stocks and the overall market up for the day. Yet, noted in the fine print of the press release and referenced by a small asterisk, these organizations say “it is uncertain whether there was an increase or decrease” because “the change is not statistically significant”. The explanation does not give you a lot of confidence in their statement. Did starts go up or down? A day earlier, John Gerspach, the CFO of Citigroup, warned there are “still some rather significant challenges to be faced” in the housing market and went one to say “I don’t use phrases like turn the corner…I have difficulty seeing corners sometimes, so I’m not sure what corner we may have turned.” So is the Census Bureau and HUD statement correct?

Let’s do a fact check on the Census Bureau and HUD.

Metrostudy has over 400 field researchers that drive by and individually verify the status of over 4.5 million lots in 48,000 subdivisions in 41 markets in 19 states every quarter, accounting for about 65% to 70% of all new home construction. We just completed our third quarter survey, and we can tell you with complete confidence that, despite their disclaimer, the Census Bureau and HUD are correct that nationally housing starts are up.

Although this headline number might be sufficient to make a broad decision like whether or not to engage further in the housing market, it is not sufficient for making decisions at the local level. Housing, after all, is inherently local. In our third quarter survey, we  saw widely divergent conditions at the local level. The so called “national housing market” is made up thousands of markets and submarkets each behaving uniquely. As an example, the Dallas-Fort Worth region experienced a robust 32% jump in starts during the third quarter because new home sales have grown throughout the year and finished new home inventory is at a 20-year low. Additionally, homebuilders raised prices during third quarter in more locations than anytime in past four years. This sounds like a pretty strong recovery. Yet 20% of the region’s submarkets experienced a decline in starts during the quarter, and 20% of the submarkets still have elevated finished inventory with builders even dropping the price on some homes. Are these good locations to build, lend or invest? At first glance you might say no, but in some cases yes they are. However, you need to understand the competitive dynamics of the location.

Further, lot inventory in DFW is at a 13-year low and the top subdivisions (accounting for 75% of the starts in the region) only have an 18-month supply of lots (below what is considered equilibrium). Homebuilders are scrambling to replace lots in these strong locations. Yet the DFW region has almost 21,000 developed lots in subdivisions with very little construction activity and almost 14,000 developed lots in subdivisions that did not have a single start in the last year. With lot supply so tight in the top subdivisions, do these developments represent a good opportunity for a builder or investor? Some will and some won’t. Some have the opportunity to become a better performing development in the near term. Some may take years to get there. A builder or investor needs to understand the unique characteristics of each opportunity. So whether you are voting for a Presidential candidate or making a multi-million dollar decision don’t just relay some broad statement you heard, do your own fact check.