Fading Lot Supplies and Affordability May Slow Nashville’s Overall Strong Housing Market

Posted in Nashville Market | Posted on 12-11-2014 | Written by Metrostudy News

  • 3Q14 New Home Starts down 1% YoY, although they are up 13% from 2Q14
  • We continue to see a decline in the number of Vacant Developed Lots, which are down 9% YoY and 22% since 3Q12

December 2014:  Metrostudy’s 3Q14 field research of the Nashville housing market showed 1,838 quarterly construction starts, down 1% YoY but up 13% from the prior quarter. The 12 months ending in September 2014 saw 6,163 new home starts in the 8 county region, up 11% year over year from 3Q13.

The Nashville area recorded 1,645 New Home Closings in 3Q14, up 4% year over year from 3Q13, and up 18% from the previous quarter when closings reached 1,390. The trailing 12 months of activity in the area resulted in 5,626 closings in the area through 3Q14, up 12% year over year from when annual closings reached 5,009 units in the 12 months ending in 3Q13.

nash ej 3q

The 6,163 new homes built over the past 12 months also absorbed an equal number of finished lots (VDL’s), which are already in short supply in certain submarkets such as Williamson County. Lot inventory has declined by 22% from two years ago and by 9% year over year. Total VDL inventory for the region now stands at 11,400 which equates to a 22 month supply but areas such as Williamson County are down to a 14 month supply, which is considered a severe shortage (2 years’ worth of lot supply is considered about normal).

“With land and lot prices rising, higher material costs and increasing labor constraints, it appears that home prices will continue to rise perhaps into all of 2015,”  said Eugene James, director for Metrostudy, a local housing research company. “We expect to see new construction activity to increase in areas that were not seeing much activity as little as a year ago, while the core regions may experience some slowing in part, because of much higher home prices and a shortage of finished buildable lots,” said James.

For information contact:
Eugene James – 404.510.1080 cell
ejames@metrostudy.com

About Metrostudy

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

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Nashville 2Q14 Housing Survey: Strong Demand for New Homes Meets Rising Land Prices

Posted in Nashville Market | Posted on 09-02-2014 | Written by Metrostudy News

September 2014: Metrostudy’s 2Q14 field research of the Nashville eight county region housing market showed positive signs of construction growth as well as a tightening of available finished lots in more desirable areas.

Builders begin construction on 1,592 new homes in 2Q14, up 9% year over year from 2Q13 starts, and a 10% increase from the prior quarter starts level. On an annual bases construction starts were up by 23% year over year ending in June 2014 with builders starting 6,138 new homes during the past 12 months.

nashville 2q

 

New home closings experienced a 9% increase in 2Q14 compared to the same period one year earlier coming in at 1,402 closings for the quarter. Closings increased from the prior quarter as well and were up by 14%. The trailing 12 months of activity in the area resulted in 5,570 new home closings in the area through 2Q14, up 21% year over year.

With demand for new homes increasing Finished Vacant housing inventory (houses 100% finished and ready to be moved into) increased by 21% year over year to 804 units “But the FV months supply remained the same as from one year earlier, which is a low 1.7 months supply,” said Eugene James, director for Metrostudy, a local housing research company. “Equilibrium is about 2 to 2.5 months thus an under supply of finished homes still exists,” said James.

Although demand for new homes has been rising over the past few years and construction starts have been increasing, the delivery of finished buildable lots has not kept pace with this activity. Currently there are 11,604 Vacant Developed Lots in the region which calculates out to about a 23 month supply. However, certain submarkets have lot supplies as low as 14 months, and as a result, lot prices have increased substantially. “The end result will be higher home prices coming very soon,” said James.

For information contact Eugene James @ 404-510-1080
email ejames@metrostudy.com

About Metrostudy

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

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Housing starts up strong, with some stand-out markets

Posted in Atlanta Condo Market, Charlotte Market, Inland Empire Market, Naples - Ft. Myers Market, Nashville Market, National Housing Market, Reno Market, Rio Grande Valley Market, Sarasota - Bradenton Market, Southern California Market, St. George - Mesquite Market | Posted on 08-19-2014 | Written by Brad Hunter

See Top 10 Markets for New Residential  Construction Here 

brad hHousing starts numbers out today surprised many observers with its strength (+15.7%), but we find it to have been in line with our actual counts, released earlier this month. As we predicted, last month’s Census estimate was revised upward, and now the numbers are back in line with the trends revealed by the Metrostudy roll-ups.

The last release of housing starts data from the Census Bureau caused undue alarm about a collapse of activity in the South.  The Census release had shown a 29.6% decline for total starts in the South, but as we pointed out at the time, this exaggerated the weakness in the south. As a matter of fact Metrostudy’s research shows that several markets in the south are up, both based on prior quarter results, and year ago. Raleigh was down 5% versus a year ago, but Charlotte, Atlanta, Texas, and South Florida showed increases.

Metrostudy’s data show that some of the most “beaten-down” markets are now doing better.  In Las Vegas, for example, housing starts were up 16% from 1st quarter 2014 to 2nd quarter 2014, and Phoenix showed a 12.3% increase quarter-on-quarter (though it is still down sharply year-on-year). Housing starts in Chicago were up 87% quarter-on-quarter, and up 30% year-on-year.  Naples Florida showed double-digit gains, both quarterly and annually.

Some significant trends were evident in Metrostudy’s data in California. Housing starts in the Riverside area rose 48.5% quarter on quarter, and are up 14% year-on-year.

We are seeing an increase in lot development in Riverside as lot shortages around the I-15 Corridor have intensified. The Inland Empire is developing its own economy, with 3% job growth, meaning that is it is no longer just a bedroom community for L.A.

Housing starts in Northern California rose 92% in the second quarter compared with the previous quarter, and are up 19% year-on-year. Starts there are at a record high since the boom. Contra Costa and Alameda County had particularly strong increases.

Also see, Brad Hunter discuss the promising increases in the Residential Remodeling Index and New Residential Construction this month on Bloomberg TV.

 

The Nashville New Home Market…Plenty of Demand, but not Supply

Posted in Nashville Market | Posted on 06-04-2014 | Written by Metrostudy News

June 4, 2014: Metrostudy’s 1Q14 field survey results of the Nashville market shows that demand for new housing is still going strong, but there may be some supply issues lurking in the shadows.

The region recorded 1,258 closings in the first quarter of 2014, up 30% year over year when closings reached 970 units in 1Q13. On an annual bases new home closings were up 27% year over year coming in at 5,486 units sold as of the end of the first quarter.

“There is no doubt that the tremendous job growth in Nashville, averaging over 3.2% for the past 3 years, is helping to push demand for housing even higher,” said Eugene James, Regional Director for Metrostudy, a national housing intelligence and consulting firm that maintains the most extensive primary database on residential construction in the US housing market. “Strong job growth equates to rising consumer confidence and when people feel comfortable about their employment picture they feel more comfortable about making large ticket purchases like buying a new house,” said James.

And builders seem to know this. The Metrostudy “boots on the ground” field research revealed that builders begin construction on an additional 1,477 units in the first quarter of 2014, up 36% from one year ago. On an annual bases construction starts were up by 27% coming in at 6,029 new units in the past 12 months ending in March 2014. “Some may ask if this construction pace is too high but the answer would be no,” said James. In fact, the supply of new homes has been struggling to keep pace with buyer demand in almost every sub-market of Nashville. The months supply for new houses that are 100% completely build and ready for occupancy has declined down to 1.8 months. A more normal level for the region would be between 2 and 2.5 months.  “This means buyers may find it challenging to find a home ready for immediate occupancy, and it appears that new home inventory will remain rather tight thru-out the summer,” said James.

For information contact: eugene james @ 404-510-1080
Email ejames@metrostudy.com

About Metrostudy

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

About Hanley Wood

Hanley Wood is the premier information, media, event, and strategic marketing services company serving the residential, commercial design and construction industries. Utilizing the largest editorial- and analytics-driven construction market database, the company produces powerful market data and insights; award-winning publications, newsletters and websites; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

Housing Markets, Minivans and iPads – “You learn something new every day”

Posted in Nashville Market, National Housing Market | Posted on 11-26-2013 | Written by Jason Brown

The saying goes, “You learn something new every day”.  Well a few weeks ago, I learned two new things on the same day.  Number one – mini vans are actually cool and functional.  Number two – Metrostudy’s new mobile platform, Metrosearch Insight, will change the way professionals in the home building industry interact on a day to day basis.

Nashville seems to be on the top of everyone’s radar these days.  Public builders D.R. Horton, Lennar, and Meritage Homes have chosen to enter Nashville’s thriving home building market.  Several other builders, large and small are still looking for opportunity here.

Recently I had the pleasure to meet with the executive team for an out of state home builder and it was during this meeting that I learned the two new truths I mentioned above.  Day one of our visit consisted of site tours in and around Nashville.  Piling a team of 6 into most vehicles is a challenge, but our vehicle of choice – a minivan was the perfect fit.  Toyota made the minivan cool again with its Super Bowl commercial – see it here in case you missed it http://youtu.be/ql-N3F1FhW4 but for our tour we chose the Honda Odyssey.

After the team had a good laugh at the 6 of us piled in the preferred soccer mom’s vehicle of choice, we moved on to our task at hand.  Learning about and understanding the housing market in Nashville. Read the rest of this entry »

Nashville’s new home market continues to grow

Posted in Nashville Market | Posted on 08-16-2013 | Written by Metrostudy News

(Nashville, TN – August 16, 2013) Nashville should expect to see upward movement in the new home market through the remainder of 2013, 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 Nashville area recorded 1,309 Closings in 2Q13; this was a substantial increase, up 35% compared to the previous quarter. The trailing 12 months of activity in the area resulted in 4,614 closings through 2Q13; 3,855 homes were closed in the 12 months ending in 2Q12. Nashville recorded 1,460 starts in 2Q13. This was also a large increase from the previous quarter’s 1,082 starts. The 12 months ending in June 2013 saw 4,996 new home starts; the 12 months ending in June 2012 recorded 3,879 new home starts, a 29% increase year over year.

Total inventory is made up of models, units under construction, and finished vacant units. Total Inventory was up from 2Q12 to 2Q13 with 452 units added to the under construction category while finished vacant units remained flat. “Builders have responded to the demand and continue to successfully sell their limited existing inventory and new starts – most of them before completion,” said Jason Brown, Regional Director of Metrostudy’s Nashville Market.

The 12 months ending in June 2013 saw 3,149 lots delivered to the market; up 84% from the 12 months ending in June 2012 figure of 1,714. Currently, the inventory level of 13,161 vacant developed lots represents a 23% decrease over the 2Q11 level of 17,173 lots. At current absorption rates there are enough vacant lots on the ground for slightly more than 31 months of supply. “As demand rebounds and supply continues to decreases, home prices and raw land have shot up.  Builders are balancing the amount of price increases they can pass onto the consumers while trying to replenish their land and lot pipeline,” said Brown.

For information contact:
Jason Brown @ 615.349.2190
email jbrown@metrostudy.com

About Metrostudy

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

About Hanley Wood

Hanley Wood, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

Nashville’s new home market maintains growth in the first quarter

Posted in Nashville Market | Posted on 05-20-2013 | Written by Metrostudy News

(Nashville, TN – May 20, 2013) With Nashville’s new home starts continuing to increase, builders are focusing on land and vacant developed lot opportunities to keep the momentum going, 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.

Nashville has seen 35 consecutive months of positive job creation.  The Nashville Metropolitan Statistical Area February unemployment rate of 6.4% has consistently outperformed the National and State average. Williamson County continues to lead the MSA with 5.3% unemployment, but almost all counties have shown employment improvements.

The Nashville area recorded 973 closings in 1Q13; this was down slightly compared to the previous quarter. In 1Q12 the area recorded 845 closings. The trailing 12 months of activity in the area resulted in 4,322 closings in the area through 1Q13; 3,581 homes were closed in the 12 months ending in 1Q12. Nashville recorded 1,089 starts in 1Q13. This was a slight decrease from the previous quarter’s 1,155 starts. The 66 unit decrease in starts from 4Q12 to 1Q13 represented a 6% move downward. The 12 months ending in March 2013 saw 4,763 new home starts; the 12 months ending in March 2012 recorded 3,553 new home starts, a 34% increase year over year.

Demand outpacing supply resulted in inventory reductions across the board. Total inventory is made up of models, units under construction, and finished vacant units. Total Inventory was up from 1Q12 to 1Q13. 432 additional units were added to the under construction category, as builders continue to replenish their inventory. Finished vacant inventory increased by 73 units in the same time period. “Builders continue to successfully sell their existing inventory and new starts. Even model homes are being sold as inventory tightens,” said Jason Brown, Regional Director of Metrostudy’s Nashville Market.  Three years ago, 1Q10, there were 1,302 finished vacant units; representing a supply of 3.8 months. Currently 721 units are in the finished vacant category; a rate of 2.0 months of supply.

The 12 months ending in March 2013 saw 2,607 lots delivered to the market; up 47% from the 12 months ending in March 2012 figure of 1,777. First Quarter lot deliveries of 667 were down slightly compared to the amount delivered last quarter. 4,763 homes were started in the 12 months ending in March 2013. Currently, the inventory level of 13,796 vacant developed lots represents a 22% decrease over the 1Q11 level of 17,728 lots. At current absorption rates there are enough vacant lots on the ground for slightly more than 34 months of supply. This is still above a healthy market supply level of 24 to 30 months, but the story is in the details. “As absorption levels begin to pick up along with economic recovery, the overall supply levels will eventually firm up, but we are already seeing shortages in certain submarkets,” said Brown.

“These factors combined with continued steady employment growth, the area’s lack of new home inventory, for sale listings still showing a tight supply and home values remaining stable, Nashville should expect to see continued upward movement in the new home market through the remainder of 2013,” said Brown.

For information contact:
jason brown @ 615.349.2190
email jbrown@metrostudy.com

About Metrostudy

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

About Hanley Wood

Hanley Wood, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

Mid-Major Home Builders – Get ready for March Madness!

Posted in Nashville Market, National Housing Market | Posted on 03-21-2013 | Written by Jason Brown

It’s that time of year again.  This Thursday the NCAA college basketball post season begins.  (Ok, I guess it technically starts on Tuesday night, but who really counts those games anyway?)  So don’t be surprised if Thursday finds many of your co-workers suddenly using excuses like “I’m too sick to come to the office today” or “allergy season is really kicking in” or “that planned surgery I was telling you about is today”.

You know who might not be using those excuses this year?  Land Acquisition personnel for just about any builder you talk to these days.  Everyone I run into constantly tells me they are “almost out” of lots.  This goes from the largest builders in Nashville to the smallest.  And oh yea, those Mid-major builders I mentioned in the title of this article.

Brad Hunter, Metrostudy’s Chief Economist, recently took a nationwide look at vacant developed lot supply.  He reported that while it appeared on the surface that the 60+ months of supply available represented a bloated market place, the truth lies further in the details of Metrostudy’s data.   Read the rest of this entry »

The Nashville housing market continues to improve in 4Q12

Posted in Nashville Market | Posted on 02-05-2013 | Written by Metrostudy News

(Nashville, TN–February 5, 2013) With new home starts increasing, a good indicator that builders are exhibiting confidence in the market, the general consensus is the worst appears to be behind us and those in the industry are focused on the future, 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.

Nashville recorded 1,152 starts in 4Q12. This was a slight decrease from the previous quarter’s 1,301 starts. The 149 unit decrease in starts from 3Q12 to 4Q12 represented an 11% move downward. “While the fourth quarter showed a decline compared with the third quarter, comparing the same time frame to a year ago showed a 62% improvement in starts,” said Jason Brown, director of Metrostudy’s Nashville Region.  The Nashville area recorded 1,196 closings in 4Q12; up slightly compared to the previous quarter. In 4Q11 the area recorded 1002 closings.

Three years ago, 4Q09, there were 1,341 finished vacant units; representing a supply of 3.7 months. Currently in Nashville 651 units are in the finished vacant category; a rate of 1.9 months of supply. “Inventory is very tight; builders are continually having to start new homes in order to refill homes that are selling before they are even completed,” said Brown.

“Nashville’s resale market has shown improvements in sales for 18 consecutive months and prices on resale inventory appear to finally coming off the bottom. Apartment occupancy rates were still at 11 year highs and rents continue to rise. Barring any major economic setbacks, these factors combined with continued steady employment growth, the area’s lack of new home inventory, and home values increasing, Nashville should expect to see upward movement in the new home market through 2013,” said Brown.

For information contact:
jason brown @ 615.349.2190
email:  jbrown@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.

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 »