Posted in Las Vegas Market | Posted on 01-30-2014 | Written by Metrostudy News
(Las Vegas, NV – January 30, 2014) Builder confidence in the market continues to strengthen as the market is at 2008 levels. However, Metrostudy expects demand to remain steady with a possible slight decline in 2014. Tightening lending standards, lower FHA limits, rising home prices and interest rates and the expected increase in resale homes entering the market, are all factors which may cause new home buyers to rethink their home buying decisions during 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.
Through 4Q13; annual single-family new home closings were 6,686. That is 35% more than in 4Q12. The annual closing pace continues to increase, while the quarterly start pace has flattened. Metrostudy counted 1,389 new home starts during the fourth quarter of 4Q13, which is nearly identical to the 4Q12 starts. The annual start pace increased an impressive 20% but has leveled this quarter. Quarterly SFD starts were down 23% compared to 3Q13, indicative of both slightly weaker demand and lower lot supply.
“Lot inventory levels began to erode at a staggering pace over the past 24 months. “Class A” positions have quickly become in short supply this year,” said Greg Gross Metrostudy’s Regional Director in the Las Vegas market.
”The overall supply of finished SFD lots is declining and development opportunities for delivery in the next 4 years must be considered today,” said Gross. With only 8,300 Finished SFD lots, 4Q13 proved to be the quarter where large scale development began. There are nearly 13,700 lots in development compared to 3Q13 when only about 8,000 lots under development, immediate production capacity is still healthy for the next year. The majority of the new lots in development are in Cadence. It is worth noting that the last time we had this few finished lots was 2002!
“One of the most challenging issues over the past year was the availability of lots and the impact on land prices. 2012 marked a turning point for builders as they began to consider and purchase “B” and “C” grade lots just to maintain their position in the market place as the class “A” lots dwindle. 2013 marked a turning point as land development increased 81%,” said Gross.
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
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