Single-Family New Home Sales Up Year-Over-Year in January

Posted in National Housing Market | Posted on 02-25-2015 | Written by Metrostudy News

Sales of new single-family houses in January were at a seasonally adjusted annual rate of 481,000, according to estimates released today by the U.S. Census Bureau. This is 0.2% below the revised December rate of 482,000, but is 5.3 percent above the January 2014 estimate of 457,000. Metrostudy’s Brad Hunter breaks down sales expectations for 2015.


Sales of new single-family houses in January 2015 were at a seasonally adjusted annual rate of 481,000, according to estimates released today by the U.S. Census Bureau.  This is 0.2% (±22.2%)* below the revised December rate of 482,000, but is 5.3% (±22.1%)* above the January 2014 estimate of 457,000.

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In Tepid Housing Market, Builders Cater to Desires of Well-Off

Posted in National Housing Market | Posted on 02-25-2015 | Written by Metrostudy News


NEWTOWN SQUARE, Pa. — Lisa Gray spent a few months searching for a home that would span the generations, one where her two sons would want to bring friends throughout their teenage years and that her aging parents could navigate with ease.

She settled on a two-story house here tailored to include a game room for the boys and a first-floor guest bedroom to avoid the need for climbing stairs. The cost of most homes in this new development? Roughly $1 million — and up.

“I thought I would just build and make it exactly like I want,” said Ms. Gray, a managing partner at a venture capital firm, who moved into her gray-speckled-stone home three months ago.

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Rocky Mountain Way: Four Markets Climbing to New Heights

Posted in National Housing Market | Posted on 02-19-2015 | Written by Metrostudy News

Most of the Rocky Mountain Region didn’t have an end-of-year sales slump. In fact, after a strong fourth-quarter in most of the area, the Rockies are ready for consistent demand through 2015. So what’s their secret?

The cold can’t keep buyers away in the Rockies. The Boise, Denver, Salt Lake City, and St. George markets collectively saw significant closings in the new home market throughout 2014, and while some of the Nation’s hottest metros had a slower end to the year, the area kept a steady sales pace in the fourth-quarter with promise of continued momentum into this year. While prices have spiked enormously in markets seeing similar demand nationwide, most of the Rocky Mountain region held price points somewhat steady throughout the year. What’s the secret to the four metros set-up for solid sales numbers in 2014? Here are some of the trends.

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Single-Family Starts Down in January, Up Year-Over-Year

Posted in National Housing Market | Posted on 02-18-2015 | Written by Metrostudy News

The Department of Commerce reported today that single-family starts fell 6.7% in January, but Metrostudy predicts builders are gearing up for more production in 2015.

The numbers released today by the Department of Commerce show that single-family housing starts fell in January by 6.7% (plus or minus 10.6%) compared with the previous month (seasonally-adjusted).  Multifamily construction meanwhile continued to rise, up 12.1% on the month (plus or minus 25.4%). Comparing versus a year ago, single-family starts are up 16.3% (plus or minus 12.0%).

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Metrostudy Releases Q4 2014 Residential Remodeling Index (RRI)

Posted in National Housing Market | Posted on 02-18-2015 | Written by Metrostudy News

Momentum Brews at the Close of 2014, 2015 Expectations Strengthen

WASHINGTON, D.C. (February 13, 2015) — Metrostudy, a Hanley Wood company, announced today the release of its fourth quarter 2014 Residential Remodeling Index (RRI) detailing activity in the remodeling and replacement industry.

The fourth quarter national composite of the RRI registered a score of 97.2, representing a 3.1% year-over-year increase on a seasonally adjusted basis, which beat a revised third quarter year-over-year gain of 3.0%. The RRI has now posted eleven consecutive quarters of positive year-over-year gains since the market bottomed out at the end of 2011.

The RRI also saw a 1.1% increase over third quarter’s revised result of 96.1, marking the 12th consecutive rise in the index and clearly confirming the growth in remodeling activity over the second half of 2014. With demand fundamentals also firming across the country at the close of the year, particularly in employment growth, projected growth rates in the RRI for the next few quarters have strengthened. As a result, the previous forecast for the remodeling market to reach full recovery (a reading of 100.0 or more) by third quarter 2015 remains intact.

“The remodeling index saw a welcomed bounce in fourth quarter 2014, closing out a year where growth, while still in the positive, was slower than what was recorded in 2013. This trend mirrored the overall movement in home buying during the last two years, where purchasing in 2013 spiked off of previous depths, and 2014 cooled off of those spikes. The 2014 market saw the absence of first-time homebuyers and a retreat of investment buyers, leaving a slight dent in the overall measure of remodeling,” says Brad Hunter, Chief Economist of Metrostudy. “However, a job market that has begun to heat up and recent increases in consumer confidence support our expectation that 2015 will see stronger gains in remodeling activity, as well as full recovery by third quarter 2015. Wage growth rebounded in January, and if increases can stay consistent for a while, it would bode well for the younger generation of potential homebuyers to enter the market. Additionally, current and future remodeling opportunities are ripe amongst baby-boomers.”

Metrostudy produces the RRI to provide the industry visibility into local market remodeling activity, forecasted future activity, and potential demand.  According to the company’s fourth quarter report, all 381 Metropolitan Statistical Areas are expected to see year-over-year growth in remodeling and replacement projects in 2015, with average growth of 4%.

Request a full copy of the report by contacting Danielle Fiore at

About the Residential Remodeling Index

The RRI is a quarterly measure of the level of remodeling activity in 381 metropolitan statistical areas (MSA) in the U.S., with the national composite reflecting the national level of activity. “Activity” includes home improvement and replacement projects, but does not include maintenance or projects of less than $1000. The seasonally adjusted index shows the relative level of activity in the geography specified (MSA or national composite) compared to 2007 (the baseline year). A number above 100 indicates a level of remodeling activity higher than the level of activity at the beginning of 2007, which was the peak of remodeling activity in the prior decade.

The index is produced through a statistical model that leverages detailed data on remodeling activity, including household level remodeling permits, and consumer-reported remodeling and replacement projects. Quarterly historical results for the national composite and for each of the 381 Metropolitan Statistical Areas in the U.S. are available back to 2004. In addition, Metrostudy also produces annual estimates of project counts and expenditures as well as forecasts of the quarterly RRI and annual projects and expenditures. 

About Metrostudy

Metrostudy, a Hanley Wood company, is the largest provider of comprehensive research and insight for the real estate industry. Builders, developers, banks, manufacturers, retailers and many other industries all rely on Metrostudy’s data and analytics to support strategic business decisions at the local, regional and national market level.

About Hanley Wood

Hanley Woodis 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; high-profile executive events; and strategic marketing solutions. To learn more, visit




Metrostudy Economists Predict Robust Housing, Construction and Lending Activity for 2015

Posted in National Housing Market | Posted on 02-12-2015 | Written by Metrostudy News

Metrostudy’s David Cobb Presents Top Ten Healthiest Markets and Fundamental Drivers Nationwide.


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The Difference Between the Millennial and Entry-Level Buyer

Posted in National Housing Market, South Florida Condo Market, South Florida Market | Posted on 02-12-2015 | Written by Brad Hunter

Metrostudy’s Brad Hunter sets the record straight. The millennial, entry-level, and first-time buyers are not the same, and only one group of these buyers is expected to make a comeback this year. Here are four things to remember when it comes to young versus new buyers.

Predictions for the 2015 new home market largely focus on high hopes for entry-level buyers. The problem here is that entry-level buyers, first-time buyers, and millennials are often thought of as similar or the same. While the average household age of the new home buyer is getting slightly younger, and more millennials are expected to show up in the marketplace this year, there are important distinctions between these three groups of buyers. Who will really lead market improvement in 2015?


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Become a Data Driven Business!

Posted in National Housing Market | Posted on 02-12-2015 | Written by Metrostudy News

Gain the insight you need to decide where to invest capital, how to manage risk, and how to develop targeted leads to increase sales.


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Miami-Dade High Rise Condo Risks and Rewards

Posted in National Housing Market | Posted on 02-12-2015 | Written by Metrostudy News

While the South Florida single family home market has recovered nicely in South Florida, the same cannot be said for the condo market, with one stunning exception.  Let’s examine inventory and absorption levels to see where the market is hot, and where it’s not.

Metrostudy’s South Florida region is comprised of six counties along the southeast Florida coast.  The northernmost counties of Indian River, St. Lucie, and Martin counties are known collectively as the Treasure Coast, while Palm Beach, Broward, and Miami-Dade counties represent the Gold Coast.

The Treasure Coast is decidedly where the condo market is not hot.  From a peak of over 2,700 annual condo starts in 2005, the market has plummeted.  There have been no condo starts since 2008, as the market has slowly absorbed the finished, vacant inventory.  Condo housing inventory has declined to just 30 available units, so it is possible that there will be a renaissance of sorts, especially near the coast.  However, given that the Treasure Coast housing market is almost exclusively modestly priced single family detached product, a resurging condo market is likely to be an event in the distant future.

The Palm Beach and Broward condo markets are not faring much better than the Treasure Coast.  In Palm Beach County, the annual condo starts pace peaked at 8,025 in early 2006, then crashed to zero for several quarters in 2010 and 2011.  There were 150 condo starts in 2014, with 82 of them occurring in the fourth quarter. Water Club North Palm Beach marks the first high rise condominium to break ground in several years.  There’s still an overhang of over 400 finished, vacant condos from the previous boom, representing about 16 months’ supply at current absorption rates, well above the three months’ supply deemed normal.  Broward County’s condo market has followed a similar trajectory to Palm Beach, with the annual starts pace peaking at over 16,500 in the fourth quarter of 2005, then dropping to zero starts by 2011.  There are 245 finished, vacant condo units in Broward, a 20 month supply.  The current starts pace is muted; only 145 condo starts were noted in 2014. A 338 unit high rise building along the Intracoastal Waterway began construction in late 2013, and it is the only new high rise building under construction in Broward County.

The Miami-Dade condo market, by contrast, is on fire.  Let’s first examine the market as a whole, then focus on the high rise condo market located in downtown Miami, its nearby intracoastal neighborhoods, and Miami Beach.

Miami-Dade’s single family market is primarily found in the western suburbs, from Doral south to Homestead.  It is a mix of detached and attached product, with townhomes and twin villas making up 50% of starts.  The annual starts pace in 2014 was 2,715, and, at 1,732 units, housing inventory is slightly below equilibrium, at eight months’ supply.

Miami-Dade’s condo market experienced the same boom-bust cycle as the other five South Florida counties, but its recovery was much swifter and robust.  Peaking at an annual starts pace of 28,897 in the third quarter of 2005, the starts rate declined by 99.7% to an annual pace of only 93 starts by the fourth quarter of 2009.  However, during the downturn in starts, closings remained strong, with 1,432 closings recorded in the first quarter of 2010 as an example.  The net effect of this was that the peak of 21,000 condo units in finished inventory in early 2008 was rapidly absorbed so that, by the second quarter of 2012, only 4,121 units were remaining.

Exhibit 1 shows how the absorption of completed inventory occurred during 2008-2012, while Exhibit 2 indicates how finished inventory has been replaced by new construction.

Exhibit 1: Miami-Dade Annual Starts and Closings Rates

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Exhibit 2: Relation of Finished, Vacant Inventory to Under Construction Inventory

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Note that starts have recovered, with almost 6,000 units started in the third and fourth quarters of 2014.  Why have sales been so strong, even during the Great Recession period of 2009-2011?  The answer can be found in the buyer demographics of this market.

Before we delve into demographics, it’s worth a look to note what type of condo is selling in Miami-Dade.  High rise condos, also known as towers, represent 9,968 of the 11,085 total condo housing inventory as of the fourth quarter 2014.  That’s 90% of total inventory, and quite unique to the rest of South Florida, where we’ve previously noted that only two high-rise buildings are under construction.  The price range of these units range from about $300,000 to over $5,000,000, with most closings occurring in the $400,000 to $700,000 price range.  The units are typically just over 1,000 square feet, which computes to a price per square foot range of $450 to $650 per square foot.  This is two to three times that of Miami-Dade’s single family homes, which average about $170 per square foot.  So, to summarize, the product is small, expensive, near the water, vertical, and includes maintenance fees and property taxes that are a significant annual expense.

Given the product characteristics, it is not surprising that the buyer demographics are unlike that of South Florida single family home purchasers.  The high rise market is largely international in scope, with the majority of buyers from Latin America, although Europe and China contribute to the market as well.  These buyers are well-heeled, and place large deposits on the property they are buying, averaging over 50%.  It is in many instances a case of capital flight from their native country, as inflation and currency devaluation issues compel buyers to move as much money as possible to the U.S. to invest.  This also provides the developers of these high rise towers with a significant source of cash to construct the buildings, and, with the hefty deposits, cancellation rates are likely to be low.

The investment opportunity would be of little significance if the international buyer didn’t like the area, but these buyers love Miami.  The lifestyle and local culture offered is hugely attractive to Latin Americans in particular, who view Miami as clean and safe as well as sophisticated and exotic.

So, we now have over 11,000 high-rise units in inventory, with most of these under construction.  As we look ahead, what are the risks and rewards of this market?

Looking at the risks, we note that there is virtually no domestic buyer in this market, and most of the buyers are from Latin America, making this somewhat of a one-dimensional market.  Social or economic distress in just one country, such as Venezuela or Brazil, would have an impact on demand.  Also noteworthy is the construction cycle time of these buildings.  The architectural designs are phenomenal in many cases, which require skilled workers, currently in short supply.  So the typical two year cycle time for tower construction may extend a year or two beyond that, increasing the risk of closing the building.  Moreover, there’s not much transparency as to how deep this market actually is.  We know the population of the buyer’s countries, but detailed demographic information is either sketchy or non-existent.  Like any other market, the upward trend will not continue forever, but predicting a downturn is going to be challenging, and not likely to be noticed until it happens.

Nevertheless, there are rewards for those with the expertise to participate in this market.  The 50-70% deposits, with balance-to-close funds secure in the U.S. should mean that the overwhelming percentage of purchasers will follow through and close on their unit.  The large deposit schedule provides financing for the developer, unheard of in the rest of the housing market.  The buyers view Miami as the place to be, as evidenced by the screeching halt of this market at the Miami-Dade/Broward county line.  And finally, today’s market is still less than half the size of the market peak in 2005.

The wildcard for the high rise condo market in 2015 is the price of oil.  Since Venezuelans account for a notable share of this market, disruption in their native country could cause problems in the market here.  Already, we’ve seen the black market exchange rate for Bolivars mushroom from 80 Bolivars to 1 U.S. dollar in August 2014, to over 189 to 1 today.  Since oil makes up over 90% of Venezuela’s federal revenue, a 50% haircut is going to be hard felt in a country that can’t provide basic necessities as it stands now.  It is certainly going to be more difficult, and expensive, to move Bolivars offshore.  Will this tremor cause an earthquake, and shake this market’s foundation to the core?  We’re only in the top of the first inning, so it is too early to tell.  Stay tuned.

Seattle’s Top 10 Builders and Quarterly Performance

Posted in National Housing Market | Posted on 02-02-2015 | Written by Metrostudy News

The Seattle-Tacoma-Bellevue market has jumped on the path of an affordability squeeze in the third quarter for entry level home buyers with new-home closings down, but median sales prices up, according to new data released by Metrostudy.


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