We’ve got LOTS to Talk About

Posted in National Housing Market, Northern California Market, Sacramento Market, Salt Lake City Market, Southern California Market, Tampa Market | Posted on 11-04-2014 | Written by Brad Hunter

brad hAs we approach the end of the year, it is always important to start to imagine what next year will look like for housing.  I think about that question every day, debating it, analyzing it, looking at the data, and imagining different scenarios.

Over the past few years the public on builders have been announcing that they have wanted to increase their community counts. To that end, large amounts of land were bought in 2012 and 2013 that are now being seen in the data as new lot “deliveries.”  We are seeing strong increases in new lot development in markets all around The country.  (“Lot deliveries” means the number of lots brought to the stage where they are ready for a builder to begin construction — roads and infrastructure in place).

Lot Deliveries Catching up with Demand

3q BH

Let’s take a look at some national trends as well as some specific local market trends, which can lend a glimpse into the direction of single-family housing starts for 2015.

Nationwide, lot deliveries are still trailing housing starts by a tiny margin, but the gap has finally nearly closed as lot deliveries rise sharply.  In some markets, the lines have crossed (meaning that lot deliveries are now running at a pace higher than starts), and that is a bullish sign for starts in 2015.

In the broad area we call “Southern California,” lot deliveries are running at an annual pace of 17,587 (during the four quarters ending 3Q14), and that is well above the pace of a year ago (11,784), and is also above the annual pace of housing starts (15,817).  These factors both suggest immediate plans to increase home construction volume.

In Salt Lake City, annual lot deliveries are up slightly, to 7,905 in the four quarters ending 3Q14.  This level is also higher than the last 4 quarters worth of starts (7,739).

In Tampa, lot deliveries have totaled 7,301 during the past year, up from an annual pace of 3,926 a year ago.  This level is far higher than annual starts, now running at 5,995.

In Northern California, lot deliveries are running 13,098 annually, up from 8,826 four quarters ago.  The pace of lot deliveries has been outrunning starts, which are at 10,918, but very likely to move higher, based upon these new communities and lots.

These examples might not have been too surprising, but here is one that is (or maybe I should say “encouraging”):  Phoenix.  Lot deliveries are running at 14,914, up versus 8,608 a year earlier.  This recent pace is in excess of the pace of housing starts, which has run 13,460 over the past four quarters.

What to make of this:

* On the demand side, the “case” for an elevated level of production hinges on higher job growth, which should bring with it better consumer sentiment and the release of more pent-up household formations.

* On the supply side, builders have been pushing for higher community count, and that means more lot development.

This surge in lot development will very likely result in an increase in the pace of home building next year.  The trajectory of housing demand is flatter, however, than when the builders bought the raw land that is now being turned into these lots.  In some cases, builders will have to price their homes at a level lower than what they had assumed when they originally underwrote the land purchase, or face a slower absorption pace.

That said, the long-term trajectory is decidedly upward.

 

Metrostudy Market Analysis: Nevada & Northern California

Posted in Las Vegas Market, National Housing Market, Northern California Market | Posted on 07-07-2014 | Written by Metrostudy News

greg gWhat’s happening in Vegas? Greg Gross, Metrostudy regional director for Northern California and Nevada, explains the steady return to a new normal for a Sin City, a housing crash epicenter, and Nor Cal’s affordability struggle in his market overview at the 2014 Housing Leadership Summit.

https://www.youtube.com/watch?v=yihbGJ2RLnY

Over-reactions

Posted in National Housing Market, Northern California Market, San Francisco Market, Southern California Market | Posted on 06-30-2014 | Written by Brad Hunter

brad hHousing always swings much more wildly up and down than does the general economy.  A survey that came out a couple of weeks ago drove home for me the reason why.  The recent survey, from Hart/MacArthur, said that 7 in 10 people believe we are still in the middle of the [housing/economy] crisis, or that the worst is yet to come.  That seems unduly pessimistic, given that job growth is improving, and that can only help incomes and housing demand.

That said, undue optimism reigned before.  I had to go back to some old notes to make sure I remembered correctly just how wild people’s expectations were during the boom.  According to Fortune Magazine in 2005, a survey done by Shiller and Case revealed that 28% of homeowners surveyed in Boston, LA, and San Francisco believed that home values in those areas would continue rising at 20% per year for the next ten years.

Metrostudy Markets Analyses at the 2014 Housing Leadership Summit

Posted in Dallas - Ft. Worth Market, Houston Market, Las Vegas Market, National Housing Market, Northern California Market, Raleigh - Durham Market, South Florida Market, Tampa Market | Posted on 06-02-2014 | Written by Metrostudy News

The housing recovery hasn’t been a one-size-fits-all proposition. In Northern California, affordability remains a constant hurdle, while Tampa, Fla., and Las Vegas are clawing their way back after dramatic losses during the recession. In Dallas and South Florida, the markets are so strong that builders are being forced to come up with creative ways to manufacture lots. Raleigh, N.C., is also experiencing shirking supply but has recovered all of the jobs lost during the recession. And in Houston, buoyed by the strong energy sector, home prices have risen 17%. These were just some of the observations that came out from Metrostudy’s regional directors at Hanley Wood’s Housing Leadership Summit in Dana Point, Calif., in May. Check out the videos from the discussion below.

Watch Full Videos Here

Northern California housing market continues to grow in the third quarter…but slowing

Posted in Northern California Market | Posted on 11-12-2013 | Written by Metrostudy News

(Northern California – November 12, 2013) 2013 marches on with continued optimism, albeit perhaps slightly more cautiously so than in quarters past, 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.

Northern California Annual Housing starts are UP 62% from 3Q12, while closings are UP 45%. Quarterly new home closings are UP 27% from 3Q12. The annual start pace is at the highest level since 2Q08 and the annual closing rate is nearly as high as 3Q10. Closings have been outpacing starts for more than four years now. As a result, inventory levels fell below equilibrium. The increased start pace over the past year will help stabilize equilibrium.

Finished inventory of housing has been steadily decreasing over the past three years now. With 1,503 Finished Vacant homes, the market now has 1.9 months of supply. Single family detached product comprises of only 690 finished vacant; a 1.2-month supply. There are 372 units in Sacramento; a 1.5-month supply and only 318 in the Bay area; a 1.0-month supply. The inventory level of Attached product is 813 finished and vacant units, a 3.4-month supply and another 4,123 units under construction with the majority (4,029) being the in Bay Area.

Lot deliveries in Northern California have slowed dramatically over the past few years, which is helpful for those inventory levels. Lot inventory has declined 11% over the past year and now stands at 18,202 and months of supply declined to only 30. “While seemingly high, these lots continue go quickly as the market continues to improve, and not all of these lots are for sale, or in “A” locations. This slowdown of lot development will make finished lots more desirable and thus spur demand causing prices to escalate,” said Greg Gross,” Regional Director of Metrostudy’s Northern California market.

“Metrostudy expects demand to remain steady in 2014. However, there are some indicators that point to slightly fewer new home starts compared to 2013. Primarily those being lack of lot supply, slowing job growth, economic uncertainty, rising home prices and interest rates and the expected increase in resale home inventory entering the market are all factors which may cause new home buyers to rethink their home-buying decisions during 2014,” said Gross.

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 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.

Northern California housing market experiences growth in the second quarter of 2013

Posted in Northern California Market | Posted on 08-15-2013 | Written by Metrostudy News

(Northern California – August 15, 2013) The Northern California market is experiencing the same conditions as most of the county. Good news is that we expect housing starts to continue their rise spurring local economic expansion throughout the 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.

Northern California annual Job creation has remained positive for 30 consecutive months, and through June, the Region added 78,500 jobs; of which 70,900 were in the Bay Area while Sacramento added 7,600 new jobs. “Region wide, there were big gains in Retail Trades, Business Services and Education and Health Service sectors.  While positive, it is worth noting that overall job growth has slowed significantly since the beginning of the year.  In Sacramento, 6 of the 12 sectors we track have experiences annual job losses,” said Greg Gross,” Regional Director of Metrostudy’s Northern California market.  The Regional unemployed population dropped below 7% and now stands at 6.5% compared to the State level of 8.8%. Bay area and Sacramento are at 6.7% and 8.5% respectfully.

Northern California Annual Housing starts are up 63% from 2Q12, while closings are up 49%. Quarterly new home closings are up 40% from 2Q12. The annual start pace is at the highest level since 3Q08 and the annual closing rate is nearly as high as 3Q10. “Closings have been outpacing starts for more than four years now. As a result, inventory levels are now below Equilibrium,” said Gross.

Finished inventory of housing has been steadily decreasing over the past three years now. With 1,824 Finished vacant homes, the market now has 2.4 months of supply. Single-family detached product comprises of only 669 finished vacant; a 1.3-month supply. There are 317 units in Sacramento; a 1.4-month supply and only 352 in the Bay area; a 1.2-month supply. The inventory level of attached product is 1,155 finished and vacant units, a 5-month supply and another 3,075 units under construction with the majority (2,991) being the Bay Area.

Lot deliveries in Northern California have slowed dramatically over the past few years, which is helpful for those inventory levels. Lot inventory has declined 14% over the past year and now stands at 18,322 and months of supply declined to only 31. “While seemingly high, these lots will go quickly as the market continues to improve, and not all of these lots are for sale, or in “A” locations. This slow-down of lot development will make finished lots more desirable and thus spur demand causing prices to escalate,” said Gross. There are about 325,000 future lots in the pipeline with fewer than 15,000 lots being developed now; a very small number considering the size and potential demand of Northern California. Considering the barriers to development, the N. CA market is now facing a lot shortage.

“Home buyers are beginning to shop around and those who have suffered a foreclosure three years ago are beginning to enter the market once again. Given the above, Metrostudy expects the Bay Area housing market to continue improving through 2015 as the job situation continues improves and housing inventory shrinks; Sacramento and Stockton will likely benefit from the expanding Bay Area economy, as homebuyers seek more affordable homes outside of the Bay area. 2013 will be challenging as class “A” lots and entitled land will be in extremely short supply. The planning departments will need to dust off the office equipment as they will most likely see a much busier year,” said Gross.

For information contact:
greg gross @ 916-231-9370
email ggross@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.

Northern California market regains strength in the first quarter of 2013

Posted in Northern California Market | Posted on 05-08-2013 | Written by Metrostudy News

(Northern California – May 8, 2013) 2013 begins with continued optimism, more so than in quarters past, 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 Bay Area region job market is stronger than most throughout the state. All areas of N. CA have experienced annual job. San Francisco added 33,000 jobs followed by San Jose (28,900), Oakland (21,000) Sacramento (14,000), and Sonoma (7,100) Solano (3,300) and Napa (2,900). “In all, growth was realized in 10 of the 12 sectors, with relatively small losses in Other Services and Government sectors,” said Greg Gross,” regional director of Metrostudy’s Northern California, Central California, Reno and Las Vegas markets. The Regional unemployed population dropped below 10% and now stands at 7.6% compared to the State level of 9.4%. Bay area and Sacramento are at 9.2% and 7.1% respectfully.

Northern California annual housing starts are UP 82% from 1Q12, while closings are UP 48%. Quarterly new home closings are UP 66% from 1Q12. The annual start pace is at the highest level since 3Q08 and the annual closing rate is nearly as high as 4Q10. Closings have been outpacing starts for more than four years now. As a result, inventory levels are now below equilibrium. “Start activity has shifted over last year into the price ranges above $400K as builders adjust pricing to offset increased construction costs,” said Gross.

Finished inventory of housing has been steadily decreasing over the past three years now. With 1,851 finished vacant homes, the market now has 2.7 months of supply. Single family detached product comprises of only 611 finished vacant; a 1.3-month supply. There are 311 units in Sacramento; a 1.5-month supply and only 300 in the Bay area; a 1.1-month supply. The inventory level of Attached product is 1,240 finished and vacant units, a 5.7-month supply and another 2,927 units under construction with the majority (2,818) being the Bay Area. “Both the Bay Area and the Sacramento market has seen fairly dramatic decreases in Finished New Home, and existing home inventories over the past year.  All factors that will push pricing upwards,” said Gross.

Lot inventory has declined 14% over the past year and now stands at 19,184 and months of supply declined to only 35. “While seemingly high, these lots will go quickly as the market continues to improve, and not all of these lots are for sale, or in “A” locations. This slowdown of lot development will make finished lots more desirable and thus spur demand causing prices to rise.  For example, the Roseville area has fewer than 8 months of lot supply base on current absorption pace,” said Gross.  There are about 275,000 future lots in the pipeline with fewer than 15,000 lots being developed now; a very small number considering the size and potential demand of Northern California. Considering the barriers to development, the N. CA market may soon be facing a lot shortage.

“Home buyers are beginning to shop around and those who have suffered a foreclosure three years ago are beginning to enter the market once again. Given the above, Metrostudy expects the Bay Area housing market to continue improving through 2015 as the job situation continues improves and housing inventory shrinks,” said Gross.

For information contact:
greg gross @ 916-231-9370
email ggross@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.

Northern California’s housing market and economy maintain growth in 2012

Posted in Northern California Market | Posted on 02-20-2013 | Written by Metrostudy News

(Northern California–February 20, 2013) Now that 2012 has come to an end, optimism is much greater than in the past few years, 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 overall Northern California economy continues to strengthen. Annual Job creation has remained positive for 24 consecutive months, and through August, the Region added 102,900 jobs; of which 92,100 were in the Bay Area while Sacramento added 10,800 new jobs. ”The Bay Area region job market is stronger than most throughout the state. All areas of N. CA have experienced annual job growth with the exception of Napa which lost 200 jobs,” said Greg Gross, director of Metrostudy’s Northern California Region. The Regional unemployed population dropped below 10% and now stands at 8% compared to the State level of 9.7%. The Bay Area and Sacramento are at 7.6% and 9.8% respectfully.

Northern California annual housing starts are up 76% from 4Q11, and closings are up 86% from 4Q11. Clearly bucking the trend of the historical slow, fourth quarter. “The annual start pace is at the highest level since 2008 and the annual closing rate is nearly as high as 1Q11,” said Gross.  Closings have been outpacing starts for more than four years now. As a result, inventory levels are now below equilibrium.

Finished inventory of housing has been steadily decreasing over the past year now. With 1,926 finished vacant homes, the market now has 3.2 mos. Single family detached product comprises of only 615 finished vacant; a 1.5 mos. There are 298 units in Sacramento; a 1.6 mos, There are 317 in the Bay area; a 1.4 mos. The inventory level of attached product is 1,311 finished and vacant units, a 7.2 mos and another 2,704 units under construction with the majority of attached product being the Bay Area.

Lot inventory has declined 13% over the past year and now stands at 19,526 and mos declined to only 40. There are about 275,000 future lots in the pipeline with fewer than 16,000 lots being developed now; a very small number considering the size and potential demand of Northern California. “Considering the barriers to development, the N. CA market may soon be facing a lot shortage,” said Gross.

“Home buyers are beginning to shop around and those who have suffered a foreclosure three years ago are beginning to enter the market once again. Given the above, Metrostudy expects the Bay Area housing market to continue improving through 2015 as the job situation continues improves and housing inventory shrinks,” said Greg Gross.

For information contact:
greg gross @ 916-231-9370
email:  ggross@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 »

01/30/13: Metrostudy Sacramento 4Q12 Executive Client Briefing

Posted in Events, Northern California Market | Posted on 01-07-2013 | Written by Greg Gross

The Sacramento Area housing market has strengthened dramatically over the past year.  While this is welcomed news, there are new challenges lurking on the horizon; specifically with regards to Lot Supply.  Join Greg Gross at our briefing where he will discuss the Sacramento housing market and the results of our lot by lot census of new home inventory and lot supply.  Additionally, he will briefly preview our new mobile platform for iPads … Metrosearch Insight

This event is limited to subscribers to Metrostudy’s Quarterly Advisory Services.  If you are not a current subscriber and you wish to attend the event, please contact Greg Gross at 916-231-9370

When: Wednesday, January 30th 2013 from 9:00 a.m. – 11:00 a.m.

Where: North State BIA – Roseville, CA

Info: email Greg Gross @ ggross@metrostudy.com