Housing: Anatomy of the Rebound

Posted in Atlanta Condo Market, Austin Market, Chicago Market, Denver - Colorado Springs Market, Las Vegas Market, Naples - Ft. Myers Market, Naples Condo Market, Nashville Market, National Housing Market, Northern California Market, Phoenix - Tucson Market, Raleigh - Durham Market, Tucson Market, Twin Cities Market | Posted on 01-31-2013 | Written by Brad Hunter

Metrostudy’s new study of housing in markets across the country puts hard numbers to the housing recovery, and provides a detailed look at differences in the trajectory among regions.  The data (collected at the end of calendar year 2012, and newly analyzed) indicate extreme variance among markets and submarkets, with some markets’ single-family production up 90% or more versus a year ago.

Starts of detached homes rose by an impressive 46.9% from year-end 2011 to year-end 2012, and the rebound is starting a virtuous cycle, providing a much-needed boost to personal incomes, which in turn translate into still-higher demand for homes.

It is important to understand the forces that are driving construction activity higher as well as those that are restraining gains in some areas.  In some markets, there are land constraints that work to the advantage of the builders who have lot positions and ongoing projects in those submarkets, keeping the number of head-on competitors low.  Additionally, the builders that have lot positions in lot-constrained submarkets are able to push prices up much more easily, and they have a strong incentive to do so, because:  (1) they can make more profit by selling the homes at higher prices, and, (2) they don’t want to run out of lots too quickly.

Read the rest of this entry »

Naples/Ft. Myers housing market continues to gather momentum

Posted in Naples - Ft. Myers Market, Naples Condo Market | Posted on 01-29-2013 | Written by Metrostudy News

(Naples, FL–January 29, 2013) The resurgence of home building that has been under way since 2009 took a pause in the third quarter, but the forecast is for higher levels of construction over the next year, 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.

Comparing the final quarter of 2012 with the final quarter of 2011, housing construction went up an impressive 52.1%. During the final three months of last year, builders commenced construction on 625 homes, compared with 411 four quarters ago. Comparing with the prior quarter, 3Q12, starts were down 2.0%. “Part of that pullback is a normal seasonal pattern. We expect starts to increase steadily during the quarters to come,” said Brad Hunter, director of Metrostudy’s Naples/Ft. Myers market.

“The level of under-construction inventory has risen sharply, reflecting the recent surge in demand in Lee and Collier Counties. Absorption has strengthened, keeping the months’ supply of total inventory at a low level,” said Hunter.

Separated by County:

Lee County: In Lee County, starts of single-family homes rose 41.5%, from 4Q11 to 4Q12. In the fourth quarter itself, starts rose a slight 2.7%. The inventory of finished, vacant homes in Lee stayed essentially unchanged in the first three quarters of 2012, but fell sharply in the final quarter, reflecting the surge of move-ins. The supply of vacant, developed lots in subdivisions ROSE, to 7,645 as builders and developers rushed to bring more badly-needed lots to market. “The Fort Myers market is one that had been written off by many national observers, but it corrected hard, and is starting to come back,” said Hunter.

Collier County: Collier County builders initiated construction on 284 homes in the last quarter of 2012, which is up 67.1% from a year earlier. Finished, vacant housing supply fell from 171 to

131 during the fourth quarter, and the months of supply reading is now at 1.7, which is extremely low (down from 2.3 months in the prior quarter). There was an increase in completions and move-ins in Collier County. “The number of units under construction is up 80% year-over-year, so completions and move-ins should rise sharply soon,” said Hunter. The supply of vacant developed lots fell by 9% during 2012, reflecting the increase in production, and the failure of lot production to keep pace. Lot prices are being bid up as a result.

“As we move through 2013, we anticipate increased sales and production, as well as escalations in all of the strong, well-executed subdivisions in both counties. Rather than finding enough buyers, the focus for builders will be the task of securing enough lots. Diminishing supply will cause lot and home prices to ratchet higher,” said Hunter.

For information contact:
brad hunter @ 561.573.8351.
email: bhunter@metrostudy.com

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide.  In addition to providing information, the company is recognized for its consulting expertise on development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects.  Services are offered through an extensive network of offices strategically located in major metropolitan areas throughout the U.S.

02/28/13: The Naples Market: Home Prices, Lot Shortages, and the Best Leading Indicators

Posted in Events, Naples - Ft. Myers Market, Naples Condo Market | Posted on 01-14-2013 | Written by Brad Hunter

Brad Hunter, chief national economist for Metrostudy, will present the company’s original research on the Naples housing market.  Metrostudy is the premier research firm serving the homebuilding industry nationwide, collecting data in-field, lot-by-lot and house-by-house.  Mr. Hunter will discuss the latest positive developments, the potential pitfalls, as well as highlighting specific projects, deals and submarkets in the greater Naples market.

For information and to reserve, contact:

CBIA

3200 Bailey Lane, Suite 110

Naples FL  34105

239.436.6100

239.357.3257

www.cbia.net

02/15/13: Hunter to speak at Bonita Estero Market Pulse

Posted in Events, Naples - Ft. Myers Market, Naples Condo Market | Posted on 01-14-2013 | Written by Brad Hunter

market pulse

Take Advantage of Special Early Reservation Savings!
$30 per person until Friday, January 4th

To Register Please Click Here

You may also RSVP Online at BonitaSpringsChamber.com

Event Location Map: Click Here

Thank You 2013 Sponsors!


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Age Targeted Housing Demand in Florida: What the Future Holds

Posted in Central Florida Market, Jacksonville Market, Naples - Ft. Myers Market, Naples Condo Market, National Housing Market, Sarasota - Bradenton Market, Sarasota Condo Market, South Florida Condo Market, South Florida Market, Tampa Market | Posted on 01-02-2013 | Written by Bob Hamilton

Active adult, or “age-targeted” housing has been a major driver in new home development in Florida for decades. Retirees, mostly from the Northeast and Midwest, have historically migrated to the east and west coasts of Florida due to affordable housing, low taxes and favorable climate. Many of these retirees have been attracted to over-55 age restricted communities that have their own dedicated amenities tailored towards older residents.

However, events over the past decade have changed migration patterns into the state.  Escalating home prices and lingering impacts from a number of major hurricanes originally caused migration trends to reverse starting around 2005.  Additionally, the deep national recession further limited migration into the state over the latter half of the decade. A generational shift from the “Greatest” generation to the “Baby “Boomers” has also had a significant impact on migration, not only for Florida, but throughout the country.

To what extent have retiree migration trends changed in Florida over the past decade?

Richard Johnson, director of retirement policy research at The Urban Institute, states in a recent article entitled “The Shifting Retiree Migration,” that in 1990, more than one in four retirees age 55 to 65 that relocated across state lines moved to Florida, and that seven of the top 10 cities for migrating retirees were located in Florida. Over the past five years, however, Johnson’s analysis indicates that while Florida is still the most popular destination for relocating retirees, it attracted only one in seven of those age 55 to 65 who crossed state lines between 2005 and 2010. Only three metros in the state now rank among the nation’s top 10 magnets for retirees, with retiree demand shifting to cities such as Phoenix, Atlanta, Las Vegas, and Dallas, as well as other fast-growing metros in the Sunbelt. Even northern cities like New York, Washington DC, and Chicago have retained a greater share of their retirees driven by recent economic conditions or changing generational preferences.

Has this recent loss in retiree market share impacted new single family age targeted housing demand? An analysis of Metrostudy’s annual closings data within age targeted communities seems to corroborate these findings in some Florida markets. Closings for new age targeted product within the Sarasota-Bradenton market accounted for over 36% of all single family closings in 2000. By  3Q 2012, only 10.7% of all annual closings were within retiree communities. Demand for age targeted communities in the Naples-Ft. Myers market, which once had a nearly 34% market share, currently only accounts for 3.2% of all single family closings. Statewide (all Metrostudy markets combined), age targeted market share has declined slightly since 2000, from 17.7% market share in 2000 to 15.2% annually in 3Q 2012.

Not all markets, however, have experienced a decline. Age targeted demand in Metrostudy’s Central Florida market has increased over the past two years and now accounts for over 29% of all annual closings, up from 18% in 2000. Single family age targeted demand has also increased in the Jacksonville market, with 4.3% market share in 3Q 2012, up from .3% in 2000.

Ratio of Annual Single Family Closings within Active Adult Communities vs. All Communities by Florida Market

bob chart

Given these recent trends, what lies ahead for new, single family, age targeted development in Florida? Projections produced by the Florida Office of Economic and Demographic Research show a 29% increase in population for those residents aged 55 and up by 2020. This is well above the 11% increase projected for all age groups, and indicates that older buyers will remain a significant market segment within the state over the coming years.

Retiring Baby Boomers are generally more active than their predecessor, and tend to desire an area that appeals to their varied lifestyle. Traditional retiree markets are therefore not expected to be a major destination for this segment, with these buyers instead gravitating towards new emerging markets in central Florida and Jacksonville. This trend has so far been corroborated by each these market’s age-targeted closings activity over the past decade. Price will also be a major factor, with markets having a low land basis likely outperforming those with higher land costs.

Despite these generational changes, there will be a place for age-targeted development in Florida over the coming years, especially as builders market communities that appeal specifically to the Boomer lifestyle. Sales activity at most active age-targeted communities has improved throughout the state over the past year, and there remains enough lot supply to account for near-term demand in most markets, with approximately 18,792 vacant developed lots and 90,220 future lots designated for age targeted development. This improvement in demand, combined with expected over-55 population growth, should allow for stable age-targeted market share over time, even with changing buyer preferences.

“Forget Halloween: The Naples/Ft. Myers Market is Back from the Dead”

Posted in Naples - Ft. Myers Market, Naples Condo Market, National Housing Market | Posted on 11-05-2012 | Written by Brad Hunter

Naples and Ft. Myers, once written off for dead, are in the midst of a bona-fide rebound. On top of the stories of people camping out to buy homes again at Riverstone (we hadn’t seen this since 2005!), and of widespread price increases, we see numeric proof.

New home construction is up 23.7% versus a year ago in the two-county area. Metrostudy’s Naples/Ft. Myers data come from a 100% count of all of the new subdivision activity in Lee and Collier Counties. The pace of move-ins rose in both counties, and finished inventories are under 2.5 months of supply.

The result of this rebound in demand and tight supply: higher home prices. Builders in the Naples and Ft. Myers markets HAVE to charge more, because lot prices are up huge, and because labor and materials costs are rising fast as well. In the “A” locations, lots cost twice what they did a few years ago. The “B” lots also have multiple bidders, and, well, as for the more remote lots, let’s just say “C” is the new “B.”

The one “headwind” that we are still facing is anemic job growth. This presents a particular challenge to the first-time home-buyers, who are also hampered by onerous demands for documentation in order to get mortgage approval, difficulty with downpayments, black marks on their credit, and, for the youngest of them, massive student loan debt. The rental market is the haven for many of the would-be first-time buyers.

Move-up buyers seem to have adequate job security, savings, and credit scores. They are driving demand, seizing the opportunity offered by 4% mortgage money and attractive home prices. Many of them have lost interest in trying to buy short sales and foreclosures.

Retiree buyers, once they shook off the post-Lehman jitters, started to once again play a major role in the housing market, and they are a growing share of buyers today. This segment of buyers has the most equity, and in some cases, is buying with cash.

Here are the top 10 communities in the market, ranked by annual starts:

top ten

Lee County
Lee County constitutes the Ft. Myers market. Active subdivisions in Cape Coral, and Lehigh Acres are included in this research, but scattered lot activity is not.
In Lee County, housing starts rose to 371 in the latest quarter, up 70% from the previous quarter, and up 63% from four quarters ago. The pace of move-ins fell 18% compared with the prior quarter, returning to essentially the same pace as a year ago.
Finished, vacant new home inventories rose to 168, from 155 in the prior quarter, but still works out to only 2 months-of-supply.

Home prices in the Ft. Myers market are rebounding, having overshot on the down side (at the lowest, hitting a median resale price under $90,000). The extreme affordability of housing in this market triggered a flurry of buying activity (heavily driven by investors) that has soaked up much of the excess inventory in this market. The supply of vacant, developed lots fell to 7,830, almost 1,000 below the peak in 2007.
There are an additional 50,833 ‘future’ lots that are in the pipeline in Lee County, and we continue to monitor the progress on the small share of those that are currently moving forward.

Collier County
Collier County builders initiated construction on 269 homes in the second quarter, which is 47% more than in the first quarter, and 42% higher than a year ago.
The pace of move-ins has remained flat, but will likely increase substantially in the next two quarters, as buyers start to move in to homes purchased earlier this year.
The supply of finished, vacant new homes has fallen 11% in the past year, and is down to only 159 homes. This compares with nearly 900 back in 2007.
There are 5,161 vacant, developed lots in Collier County, down from 5,526 a year ago. We continue to monitor the progress of another 21,915 ‘future’ lots that are in the pipeline.

Naples/Ft. Myers housing market continues to gather momentum

Posted in Economy, In The News, Naples - Ft. Myers Market, Naples Condo Market | Posted on 10-22-2012 | Written by Brad Hunter

(Naples, FL–October 22, 2012) The resurgence of home building that has been under way since 2009 took a pause in the third quarter, but the forecast is for higher levels of construction over the next year, 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.

“Builders started work on 6.4% fewer homes in the third quarter, but the level of construction is still high relative to recent years, and the upward trend remains,” said Brad Hunter, director of Metrostudy’s Naples/Ft. Myers market.

The forecast of higher construction levels for next year is partly driven by the efforts local home builders have exerted to acquire an increased supply of home sites. “Builders are bidding against each other for lots, and that means they are determined to have enough supply to meet the demand for new homes next year,” said Hunter.

Separated by County:
Lee County: In Lee County, housing starts fell 11.1%, from 371 during 2Q12, to 330 during 3Q12. Other than the second quarter’s pace, this third quarter pace is still the highest since 2007, and it is 35.8% higher than the pace a year ago. The pace of move-ins rose to 263, which is 16.4% higher than the second quarter’s pace, and slightly above the average pace over the last 4 years. The finished, vacant new home inventory rose from 160 to 162, but this still works out to only 1.9 MOS, the same level as the previous quarter. The supply of vacant, developed lots in subdivisions fell to 7,673.

Collier County: Collier County builders initiated construction on 271 homes during 3Q12 which is the same number started during 2Q12, and 11.5% higher than a year ago. There has not been a higher quarterly starts pace since 2007. Quarterly move-ins rose 13%, from 185 to 209, but are up only 3% over a year ago. “Move-ins will increase soon, as the recently started homes become completed,” said Hunter. The supply of finished, vacant new homes has fallen 7.7% since a year ago, but rose from 159 homes to 167 during 3Q12. The finished-vacant months-of-supply figure rose from 2.3 to 2.4, still in the healthy range. There are 4,749 vacant, developed lots in Collier County, down from 5,236 a year ago.

For information contact:
brad hunter @ 561.573.8351
email bhunter@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing information, the company is recognized for its consulting expertise on development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices strategically located in major metropolitan areas throughout the U.S.

Naples/Ft. Myers housing market begins to gather momentum

Posted in In The News, Naples - Ft. Myers Market, Naples Condo Market | Posted on 07-24-2012 | Written by Metrostudy News

(Naples, FL– July 20, 2012) Starts have once again increased to a level higher than move-ins, and we are convinced that this is a positive trend, in that builders are getting more pre-construction 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.

“Builders in Naples/Ft. Myers started work on 63% more homes in the second quarter of 2012 than in the prior quarter, and 54% more than four quarters ago. The current pace of construction is now triple the pace at the bottom of the downturn,” said Brad Hunter, director of Metrostudy’s Naples/Ft. Myers market.

“Builders experienced a huge improvement in sales in the first half of the year,” Hunter said.

The one “headwind” that the market is still facing is anemic job growth. This presents a particular challenge to the first-time home-buyers, who are also hampered by onerous demands for documentation in order to get mortgage approval, difficulty with downpayments, black marks on their credit, and, for the youngest of them, massive student loan debt. The rental market is the haven for many of the would-be first-time buyers, according to Metrostudy.

Separated by county:

Lee County: Housing starts rose to 370 in 2Q12, up 70% from 1Q12, and up 63% from four quarters ago, according to Metrostudy’s latest count. The pace of move-ins fell 19% compared with the prior quarter, returning to essentially the same pace as a year ago. Finished, vacant new home inventories rose to 172, from 156 in the prior quarter, but are still well below the 300-400 levels from 2008-2009. The supply of vacant, developed lots fell to 7,814, down from the peak of nearly 9,000 in 2008.

Collier County: Builders initiated construction on 274 homes in 2Q12, which is 54% more than in 1Q12, and 44% higher than a year ago. “The pace of move-ins has remained flat, but will likely increase substantially in the next two quarters, as buyers start to move in to homes purchased earlier this year,” said Hunter. The supply of finished, vacant new homes has fallen 11% in the past year, and is down to only 159 homes. This compares with nearly 900 back in 2007.

“Within the most desired Naples and Ft. Myers submarkets, the recovery is clearly taking hold and sustaining its momentum. In others, things are static. As the economy continues to improve, demand will increase for primary housing, retiree housing, and vacation homes. Overall, the forecast remains for a slow climb, in terms of new construction volume.” said Hunter

For information contact:
brad hunter @ 561.228.8001 x501
email bhunter@metrostudy.com

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

Naples/Ft. Myers housing market slowly climbs in 1Q12

Posted in Naples - Ft. Myers Market, Naples Condo Market | Posted on 05-04-2012 | Written by Metrostudy News

(Naples, FL– May 4, 2012) The Naples/Ft. Myers housing market made small gains, but the trend toward recovery is clearly continuing during 1Q12. 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.

The recent job growth in this quarter was much more solid than recent quarters. “Primary demand for housing units will grow as unemployment falls,” said Brad Hunter, director of Metrostudy’s South Florida division. As of February, the unemployment rate in Collier County was 8.3%, versus 10.2% a year earlier; the unemployment rate in Lee County was 9.4%, down from 11.4% a year earlier. Meanwhile, low prices will continue to attract retirees and workers with secure jobs.

Single-family housing starts in Lee and Collier combined rose from 390 during the fourth quarter of 2011 to 408 during the first quarter of 2012. Total housing inventory (the sum of units under construction, finished vacant units, and decorated models) fell another 8.8% from 1,096 at the end of the fourth quarter to 999 and the end of the first quarter. The level of finished, vacant inventory continued to fall, from 342 at the end of the fourth quarter, to 293 at the end of the first quarter. This represents only 2.0 months-of-supply at the current annual move-ins pace.

Separated by county:
Lee County: Housing starts rose a bit to 232 during the first quarter, from 224 during the fourth quarter. This pace has been fairly consistent over the last four quarters. There were 7,927 vacant developed lots in active subdivisions in Lee County at the end of the first quarter, down from 8,133 at the end of the fourth quarter.

Collier County: Starts rose slightly from 166 during the fourth quarter to 176 during the first quarter in 2012. Move-ins fell versus the fourth quarter, from 234 to 202, but still exceeded starts. The number of finished vacant homes fell once again, from 178 at the end of the fourth quarter, to 137 at the end of the first quarter. Total housing inventory was down from 559 to 533 as of the end of the first quarter.

“In certain submarkets, the recovery is clearly taking hold and sustaining its momentum. In others, things are static. As the economy continues to improve, demand will increase for primary housing, retiree housing, and vacation homes. There has been a distinct but modest increase in new foreclosure filings since last May or so, which was expected as the banks recovered from the ro-bo signing fiasco. Filings were markedly in Collier in February and March, and Lee in March,” said Hunter.

For information contact:
brad hunter @ 561.228.8001 x501
email bhunter@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

Naples/Ft. Myers housing market sees surprises in 4Q11

Posted in Naples - Ft. Myers Market, Naples Condo Market | Posted on 01-24-2012 | Written by Metrostudy News

(Naples, FL– January 24, 2012) The Naples/Ft. Myers housing market experienced a fall in construction, but a rise in home absorption during 4Q11. 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.

There was a dramatic improvement in job growth for the Naples/Ft. Meyers area in 4Q11. After losing jobs in huge numbers for most of 2010, this market is now adding jobs at a pace of over 4,000 per year. “Primary demand for housing units will grow as unemployment falls,” said Brad Hunter, director of Metrostudy’s South Florida division. “Meanwhile, low prices will continue to attract retirees and workers with secure jobs,” says Hunter.

Single-family housing starts fell from 479 in the third quarter of 2011 to only 383 in the fourth, a 20% drop. Total housing inventory fell from 1, 175 in the third quarter to 1,072 by year-end. Finished vacant inventory continued to drop sharply, from 358 at the end of 3Q11 to 343 at the end of the year. This level is down by 36% from a year ago.

Separated by county:
Lee County: Housing starts fell versus the third quarter, but are up 20% compared with 4Q10. The pace of new home absorption rose to 272 homes absorbed, up from 212 move-ins during the third quarter, but down compared to 4Q10.

Collier County: Starts fell sharply from 245 in 3Q11 to 165 in 4Q11. Move-ins rose to 233, which increased from 203. The number of finished vacant homes fell once again, from 182 at the end of 3Q11, to 179 at the end of the year. Total housing inventory also fell from 615 to 547 at year-end.

“There were a lot of surprises and twists in the Naples/Ft. Myers market in 2011. For one thing, not many people would have thought the top-selling community could be in Cape Coral. Sandoval, in Cape Coral had more starts than any other community in the two-county area. Also, it is surprising that several of the most active projects are in an upper-middle-class price range ($300,000-$400,000), and that is well to the right of the bell curve,” said Hunter.

For information contact:
Brad Hunter @ 561.228.8001 x501
email: bhunter@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.