Posted in Indianapolis Market | Posted on 10-30-2013 | Written by Metrostudy News
(Indianapolis, IN –October 30, 2013) With continued positive job growth and expected declines in the unemployment rate, Metrostudy expects steady growth in the housing market to continue through the remainder of this year and into 2014. 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.
Since 2007 The Indianapolis market has averaged approximately 865 starts each quarter. The third quarter 2013 tally of 1,275 new home starts is the most new home starts in any quarter since the second quarter of 2008 (over five years ago!). “Keep in mind, however, that the market is at such a level, that nearly any increase in the rate of new home starts or closings will seem impressive percentage-wise. That being said, following several years of market declines, the more recent uptick in new home construction is certainly a welcome sign,” said Chris Huecksteadt, Regional Director of Metrostudy’s Indianapolis Market. The third quarter number of 1,221 closings is up 25.6% compared to the 3Q12 total of 972 closings.
Finished and vacant inventory has steadily fallen in the overall market, leading to the need for new home construction as demand begins to grow. The supply of finished and vacant inventory fell to 1.6 months overall, the lowest level of supply since the start of the downturn in the housing market. Levels of new home supply are low in nearly all of the counties that make up the Indianapolis market. “The low levels of new home inventory will continue to necessitate more construction, as demand will continue to increase if job growth is sustained,” said Huecksteadt. With the consistent pace of new home construction (the rate of lot absorption), and a declining level of vacant developed lot inventory, the months of supply for lots in Indianapolis has fallen from a high of nearly 80 months in 2Q09, to a current level of just 33.8 months.
New lot development has begun to occur at levels not seen for several years. There were nearly 1,800 new lots delivered in the first nine months of this year (2,679 in calendar year 2012). Lot deliveries in 2012 were the most in a year since 2006. “Of course the location and pricing of some of the existing lot inventory will limit those lot’s ability to be absorbed moving forward,” said Huecksteadt.
“Metrostudy does not expect a dramatic increase in the rate of new home construction to occur through the end of the year. There are still several obstacles in the way: high energy prices, lack of consumer confidence, and some uncertainty that the growth seen in the local economy will be sustained. In addition, relative to the size of the housing market, there is a considerable amount of competition fighting for the potential new home buyers that are out there,” said Huecksteadt.
For information contact:
chris huecksteadt @ 847.241.6570
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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