High Expectations Meet a Weaker Economy

Posted in Northern Virginia Market | Posted on 12-10-2014 | Written by Metrostudy News

  • Our 3Q14 survey shows annual new home starts down 6% YoY;
  • Loudon County is the most active market area in Northern Virginia, with prices up 23% since 3Q12;
  • There are more choices for homebuyers as resale listings are up and the number of new-home communities has increased

December 2014: Metrostudy’s 3Q14 survey of the Northern Virginia housing market showed the annual new home starts rate of 8,179 down 6% from 3Q13’s rate.  Expectations for this year were much higher, but the weak economy may be taking its toll on the homebuilding industry. Annual new home closings were up as builders closed 8,584 units over the last four quarters. This represents an increase of 6% over the previous year, but competition has increased. There are more communities open now compared to last year, as measured by our model home count.

In the resale home market, supply is growing but not by enough to shift the market in favor of buyers. September resale listings in Northern Virginia numbered 13,795 units, up 37 percent from a year ago. Despite this sizeable increase, resale inventory corresponds to only 4.3 months of supply, which is rather low. Nationally, 6 months is considered normal, so prices should continue to climb though at a more moderate pace.

“Loudoun County is easily the most active market area in Northern Virginia, generating 3,450 starts during the year ending 3Q14,” said Ben Sage, Director of Metrostudy’s Mid-Atlantic Region.  “This is actually down 11% from one year ago. The Loudoun County housing market has been a major beneficiary of defense-related jobs in Northern Virginia, but the weakness in the Scientific/Technical sector appears to be affecting builders in Loudoun more than any other area. Affordability is another issue, as the median new-home price has grown from $443,600 in 3Q12 to $547,000 in 3Q14, a 23 percent increase in only two years. Loudoun furthermore suffers from a shortage of lots, as vacant developed lot inventory measures only 15 months as of 3Q14.”

Prince William County is the second most active area with 1,319 annual starts, which is also down from one year ago – minus 7 percent. In fact, of the six most active counties in terms of starts, only two generated an increase in annual starts from one year ago. The 838 starts in Stafford are up 6%, and the 309 starts in Frederick are up 38%. Culpeper generated the largest percentage increase, growing 63 percent from 97 annual starts in 3Q13 to 158 in 3Q14.

The overall inventory of vacant developed lots (VDL), or finished lots, numbered 21,991 in 3Q14, which is up slightly from a year ago. With starts beginning to decline, the supply of VDL inched upward to 32 months up from 29 months a year ago. This is above normal for the area, but supply varies greatly by market area. Supply is generally smallest in the counties with the most starts: Fairfax, Loudoun, and Prince William. Higher lot supplies persist in Caroline, Warren, Orange, and King George Counties.  With some key submarkets under-supplied with lots, it is very important to monitor the pipeline of future lots.

Given the relative weakness in the demand indicators, it becomes increasingly important to monitor new-home supply. Finished vacant new homes in Northern Virginia number 1,044 units, which is up 34% from one year ago. Current inventory would last only 1.5 months at the 3Q14 annual closings pace. This is low, particularly given the amount of attached- product being built, but it is up from 1.2 months last quarter. This trend supports the anecdotal reports that some builders were building homes on spec in anticipation of demand that has been slow to materialize.

“The weakness in the market as reported by builders throughout the year has been evident in Metrostudy’s weekly survey of sales traffic and contracts, and it was apparent in this quarter’s field survey results as well,” said Sage.  “Over the last few years consumers have benefited from homebuyer tax credits and very low mortgage rates, and this drew down the buyer pool. We need job growth to replenish this pool and re-energize homebuilding, but the region just can’t get any traction on this front. Until it does, modest expectations of new home demand are warranted.”

For information contact:
Ben Sage -703.574.8429
bsage@metrostudy.com

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. Metrostudy provides research, data, analytics and consulting services to help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. For more information, visit www.metrostudy.com

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.

Lots of Catch-Up

Posted in Atlanta Market, Austin Market, Central Florida Market, Dallas - Ft. Worth Market, Denver - Colorado Springs Market, Houston Market, Inland Empire Market, Jacksonville Market, Las Vegas Market, Maryland Market, Naples - Ft. Myers Market, National Housing Market, Northern Virginia Market, Phoenix - Tucson Market, Raleigh - Durham Market, Sarasota - Bradenton Market, South Florida Market, Southern California Market, St. George - Mesquite Market, Tampa Market | Posted on 08-04-2014 | Written by Brad Hunter

brad hWe have been talking for years about the lot shortages that builders are facing.  Now, it’s time to talk about how many lots are being developed.  Builders and developers are now playing “catch-up,” with builders buying land and lots and developers/investors paving roads and putting in infrastructure to serve the builders’ needs at a frenetic pace.

The pace of lot delivery (completion, ready for the builder) has gone up 140% in the past two years, much faster than the pace of housing production has risen (+84%).  Despite this increased pace, lot development STILL lags the pace of home production nationwide.

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In some markets, the lot production machine is in full gear, and has caught up with demand.  This is a good sign for builders, and a vital turning point for home production in 2015 and beyond.

The TOP TEN states for lot production in 2Q14 are:

State       2nd Q.   Starts        2nd Q. Lot       Deliveries
Texas 19,714 18,931
Florida 12,416 10,974
California 10,050 10,219
North Carolina 4,866 3,168
Georgia 4,489 1,270
Colorado 3,985 3,276
Arizona 3,519 4,596
Maryland 2,436 2,122
Utah 2,328 2,498
Virginia 2,198 1,850

Note that lot production has caught up with new home production in California, Arizona, and Utah.   Florida development is woefully far behind demand for lots, hence the skyrocketing cost of finished lots there.

Metrostudy defines “future lots” as those that are in the pipeline (some are pre-entitlement), and Florida has the deepest pipeline.   Below are the top 10 states ranked by known future lots.

State Future Inventory
Florida 1,597,055
California 1,378,299
Arizona 1,213,476
Texas 651,413
Colorado 406,613
Georgia 316,956
Illinois 281,054
Nevada 227,121
Maryland 194,829
Virginia 183,613

 

Is Activity in the South…Going South?

Posted in Atlanta Market, Central Florida Market, Charlotte Market, Dallas - Ft. Worth Market, Houston Market, Jacksonville Market, Naples - Ft. Myers Market, National Housing Market, Northern Virginia Market, Raleigh - Durham Market, Rio Grande Valley Market, San Antonio Market, Sarasota - Bradenton Market, Suburban Maryland Market, Tampa Market, The Triad Market | Posted on 08-04-2014 | Written by Brad Hunter

The brad hgovernment release on housing starts for June showed a sharp decline, concentrated in what the Census Bureau defines as “The South.”  Single-family starts were down in June by 9.0% from the previous month, and down 4.3% from twelve months earlier.  Within that number, almost all the decline was in the South, down 20.1% versus the previous month and down 14.5% versus a year ago.

Rumors of the South’s demise are greatly exaggerated.

Read Full Article and See Quarterly SFD Starts

 

 

 

 

Northern Virginia Housing Market Metrostudy 1Q14 Survey Results: Housing Market Starts Holding Steady into 2014

Posted in Northern Virginia Market | Posted on 05-15-2014 | Written by Metrostudy News

May 15, 2014: Metrostudy’s 1Q14 survey of the Northern Virginia housing market indicates a respectable start to the year. Starts in the first quarter alone numbered 2,103, a 1.7% increase from 1Q13. According to our quarterly survey, home starts, attached and detached, in Northern Virginia numbered 8,719 during the year ending 1Q14, up 12% from a year ago. Annual new home closings, or “move-ins” by Metrostudy methodology, were also up as builders closed 8,550 units over the last four quarters. This represents an increase of 19% from the previous year.

In the resale home market, demand continues to outpace supply. March resale listings in Northern Virginia are up 31% from a year ago. Despite this increase, resale inventory stands at only 2.6 months of supply, which is extremely low; nationally, 6 months of supply is considered normal, so prices should continue to climb. Rising resale home prices should eventually allow builders of new homes to raise prices as well.

“Loudoun County is easily the strongest market area in Northern Virginia, generating 3,869 starts during the year ending 1Q14,” said Ben Sage, Director of Metrostudy’s Mid-Atlantic Market. “It may be difficult for Loudoun to maintain this type of dominance due to scarcity of land and rising home prices. Prince William County is the second most active area with 1,378 starts, which is actually down slightly from one year ago. Loudoun and Prince William are next in the path of growth from the more mature Fairfax County, which generated the third most starts in Northern Virginia at 1,251 units. There were 839 starts in Stafford County over the past four quarters, which is 255 more starts than a year ago. This represents the largest percentage increase among all areas at plus 44%.”

The overall inventory of vacant developed lots, or finished lots, increased slightly from one year ago to 21,978. This is for all product types, including attached product as well as custom lots. Despite the modest increase, the months supply of VDL fell to 30 months from 33 months one year ago. This is approaching normal, and it is down from 43 months only three years ago. The supply of VDL varies greatly by county. Supply is generally smallest in the more active submarkets: Fairfax (9 months), Loudoun (14 months), Prince William (18 months), and Stafford (22 months). Higher lot supplies persist in Caroline, Frederick, Warren, King George, and Orange Counties.

“With some key submarkets under-supplied with lots, it is very important to monitor the pipeline of future lots,” said Sage. Even though first quarter starts were similar to one year ago, builders are reporting mediocre sales. Even so, spec-home inventory remains in excellent shape. Finished vacant new-housing units in Northern Virginia number 937 units, which would last only 1.3 months at the current closings pace. This is the lowest first-quarter reading in many years. The number of finished empty units did increase slightly in 1Q14 compared to 1Q13, but closings are much stronger now. Overall, builders appear to have very little quick-close inventory.

The decline in job growth in recent months is worrisome, and it is contrary to several positive national economic indicators. Builders are reporting mixed results from the spring selling season, indicating that some of the 1Q14 starts are probably spec builds in anticipation of demand. Builders are being cautious with price increases, and they have gotten a little more aggressive with incentives in some locations in order to move product. If the economy rallies starts should be up this year, but that is mainly due to activity in Loudoun and Stafford Counties. “The rest” of Northern Virginia may struggle to outpace last year’s output in 2014.

For information contact: ben sage @ 703.574.8429
Email bsage@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.

The Washington DC new housing market strengthened in the third quarter

Posted in Northern Virginia Market | Posted on 10-30-2013 | Written by Metrostudy News

(Washington, DC – October 30, 2013) Looking forward we expect activity to continue to increase, particularly in the core counties as the resale market draws down inventory. Lot shortages in these areas will likely cause activity to bleed over to the exurbs in late 2013. The result should be continued price escalation in the core and an increase in starts in second tier markets. 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.

New housing production increased by 26.8% versus 3Q12, which marks two years of consecutive year-over-year increases. Closings were up by 23.7% versus the same quarter last year, up for the fifth consecutive quarter. Annual starts were again above annual closings and higher than any time since early 2008.

Overall new housing inventories now sit at 5,501 units, which represents an 8.0-months’ supply. The months of supply has fallen from the 8.9 months experienced in 3Q12 when there were 4,835 units in inventory.

Vacant developed lot (VDL) inventories increased slightly even as new communities open and lots created are quickly utilized. The market has just over 21,435 VDLs available at the end of 3Q13, an increase of 370 lots over the prior quarter. Due to the increase in starts, the overall supply of lots in the region dropped to 29 months, a marked drop from the nearly 60 months of supply seen several years ago.

For information contact:
Phillip Rassel @ 404.751.9440
email prassel@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 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.

The Washington DC markets maintains growth in the first quarter

Posted in Northern Virginia Market | Posted on 05-16-2013 | Written by Metrostudy News

(Washington, DC – May 16, 2013) 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 Washington DC economy continues to expand, adding 39,700 jobs from February 2012 to February 2013. Currently, the MSA has 3,033,100 jobs, a slight decline from the fall of 2012. The unemployment rate in the DC area has decreased, currently at 5.2%, still significantly below the national rate of 7.6% and ranked 39th amongst MSAs. Over 1Q13, the I-81 corridor has improved in job growth. “The region as a whole added 2,700 jobs over the year. While automatic federal spending cuts have many businesses in the area feeling cautious, the labor market is holding steady for now,” said Melissa Jonas, regional director of Metrostudy’s Mid-Atlantic Market.

New homebuyer traffic was 10.4% below the level seen in 2012 in the first quarter, while contracts were up by 8%. The activity seen in the past three months was higher, with the conversion rate rising by 19% versus 1Q12 rates. Year-over-year for the quarter, cancellation rates fell by 21% to an average 10% rate, the lowest rate seen since the first quarter of 2005. New housing production increased by 36.7% versus 1Q12, which is the seventh consecutive year-over-year increase. Closings were up by 27.7% versus the same quarter last year, up for the third consecutive quarter. Annual starts were again above annual closings and higher than any time since early 2008. “Key areas, like Loudoun County, are benefiting from this increase in activity while the push into the exurbs has not manifested itself to date,” said Jonas.

Overall new housing inventories now sit at 4,941 units, which represents an 8.0-months’ supply. However, 35% of these new units in inventory are condominiums that are under construction or are sitting finished but vacant, with many of these units contained in just a handful of high-rise properties. Condos currently have 19.5 inventory months available. Removing the condos from the equation and looking only at the single family and townhome units, we find that there is roughly a 6.1-month supply of units.  “Tight new home inventories, combined with tight resale inventories, make for a difficult marketplace for buyers.  It is a great time to be a seller, as long as you have your next home secured,” said Jonas.

Vacant developed lot inventories decreased slightly again as new communities open and lots created are quickly utilized. The market has just fewer than 21,500 VDLs available at the end of 1Q13, a decrease of 563 lots over the prior quarter. Due to the increase in starts, the overall supply of lots in the region dropped to 31.6-months, a marked drop from the nearly 60 months of supply seen several years ago. Lot supplies are much tighter in the core counties where nearly three-quarters of the activity is occurring and the supply averages 12.7 months. By contrast, in several exurban areas, the supply of VDLs exceeds 175 months. “Continued demand in the core counties has made the competition for lots increase along with prices,” said Jonas.

“Looking forward, we expect activity to continue to increase, particularly in the core counties as the resale market draws down inventory. Lot shortages in these areas will likely cause activity to bleed over to the exurbs in late 2013. The result should be continued price escalation in the core and an increase in starts in second tier markets,” said Jonas.

For information contact:
melissa jonas @ 703.244.5229
email melissaj@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.

Shopping, Shipping, and Shifting Hubs

Posted in Economy, National Housing Market, Northern Virginia Market, Suburban Maryland Market | Posted on 04-08-2013 | Written by Metrostudy News

I love the fact that I can purchase just about anything I want, anywhere, at any time with a few simple touches to the screen on my phone.  My order is delivered to my home in no time, and delivery time continues to grow shorter as companies like Amazon rely on bigger regional distribution centers.  I started thinking about this retail magic and how meli1the changes to our global supply chains, and those yet to come, will shape how we live and work.  On one of my recent trips to Baltimore, I was reminded of a potential game changer – Panamax.

Sometime in 2015, the $5.25 billion widening of the Panama Canal will be complete and a new class of super ships will be able to pass.  The Port of Baltimore is poised to accept these 1,200’ long, post-Panamax ships, capable of carrying three times more cargo than the traditional ship.  The port is now home to four, 400-foot-tall cranes, the largest of their kind in the maritime industry. These cranes can reach 22 containers across on a container ship and lift 187,300 pounds of cargo.  Even though the ships won’t arrive for some time, operators of the ships are planning which ports they will ship to and Baltimore stands ready to compete with its 50-foot channel and new cranes. Read the rest of this entry »

02/19/13: Metrostudy Maryland, DC, and Virginia 4Q12 Executive Client Briefing

Posted in Events, Maryland Market, Northern Virginia Market | Posted on 02-07-2013 | Written by Metrostudy News

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Maryland, DC, and Virginia
4Q12 Executive Client Briefing

Join us for the 4Q 2012 Metrostudy (now a Hanley Wood company) Executive Housing Briefing, where we will discuss the National Economic Outlook and  the Maryland, DC, and Virginia Market Overview. Hear for yourself how the market may impact your business in 2013.

Get the inside scoop on trends and forecasts for 2013, including the key trends that are impacting new construction to help your business planning.

This is an invitation only event. Attendees will include only current clients and invited guests from homebuilder, developer, and lender organizations. Please feel free to forward the above link to any of your associates as there is no limit to the number of people who attend from client companies.

Tuesday February 19th, 2013

Register Here

WHERE: The Westin Tysons Corner
7801 Leesburg Pike, Falls Church, VA 22043 – Contact Number 703- 893-1340

AGENDA: 10-12: Registration starts at 10:00 am and Briefing begins at 10:30 am

SPEAKERS: Melissa Jonas

Regional Director –  Maryland and Virginia markets

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QUESTIONS: Contact: Melissa Jonas

email: melissaj@metrostudy.com

Register Here

Washington DC housing markets grows in 4Q12

Posted in Northern Virginia Market | Posted on 02-01-2013 | Written by Metrostudy News

(Washington, DC–February 1, 2013) The Washington DC MSA continues to add jobs to our regional economy and improved housing activity is being seen as a result, according to a recent quarterly 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 Washington DC economy continues to expand, adding 34,300 jobs from November 2011 to November 2012. Currently, the MSA has 3,064,800 jobs, the most since January 1991. “The unemployment rate in the DC area has decreased, currently at 5.0%, still significantly below the national rate of 7.8%. This makes the Washington DC region one of the tightest labor markets in the country,” said Melissa Jonas, regional director of Metrostudy’s Mid-Atlantic Region.

New homebuyer traffic was 6% above the level seen in 2011 in the fourth quarter, while contracts were up by 23%. The activity seen in the past three months was higher, with the conversion rate rising by 20% versus 4Q11 rates. Year-over-year for the quarter, cancellation rates fell by 18% to an average 14.7% rate. New housing production increased by 128.6% versus 4Q11, which is the sixth consecutive year-over-year increase. Closings were up by 30.3% versus the same quarter last year, up for the second consecutive quarter. “Annual starts were again above annual closings and higher than any time since 2008,” said Jonas.

Overall new housing inventories now sit at 4,875 units, which represent a 8.4-MOS. However, 37% of these new units in inventory are condominiums that are under construction or are sitting finished but vacant, with many of these units contained in just a handful of high-rise properties. Removing the condos from the equation and looking only at the single family and townhome units, we find that there is roughly a 6.2-month supply of units. Vacant developed lot inventories decreased slightly as new communities were opened and more lots were created. The market has just fewer than 22,000 VDLs available at the end of 4Q12, a decrease of only 51 lots over the prior quarter. Due to the increase in starts, the overall supply of lots in the region dropped to 34.2-months, a marked drop from the nearly 60 MOS seen several years ago. “Lot supplies are much tighter in the core counties where over three-quarters of activity is occurring and the supply averages 15.5 months. By contrast, in several exurban areas, the supply of VDLs exceeds 200 months,” said Jonas.

“Looking forward we expect activity to continue to increase, particularly in the core counties as the resale market draws down inventory. Lot shortages in these areas will likely cause activity to bleed over to the exurbs in 2013. The result should be continued price escalation in the core andan increase in starts in second tier markets,” said Jonas.

For information contact:
melissa jonas @ 703.961.1776
email: melissaj@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.

12/07/12: Real Estate Trends: 2012 Wrap Up with Melissa Jonas

Posted in Events, Northern Virginia Market | Posted on 11-16-2012 | Written by Metrostudy News

Real Estate Trends: 2012 Wrap Up and 2013 Expectations


Melissa Jonas with Metrostudy will provide a status of the real estate industry in Washington, DC and its suburbs. She will review today’s market and discuss what’s in store for 2013 and beyond. This seminar provides the opportunity to learn more about the trends and statistics shaping the local real estate industry.

Friday, December 7th
8:30am – 11:00am
Cox Communications
3080 Centreville Road, Herndon, Virginia 20171

Register Here

$25 for NVBIA Members
$50 for non-members