With Fading Affordability & Fence sitting Millennials, 2014 may be a year builders will be ready to forget

Posted in Phoenix - Tucson Market | Posted on 11-19-2014 | Written by Metrostudy News

  • Metrostudy’s 3Q14 survey of the Phoenix market shows starts down 10% for the year; closings are also trending down
  • We continue to see the strongest growth in the Northeast Valley
  • As affordability begins to fade and millennials content to wait it out it is expected that 2014 will be a lackluster year and one that some builders will be ready to forget.

November 2014:  According to the Metrostudy 3Q14 survey, home starts, attached and detached, in the Phoenix area numbered 10,755 over the last four quarters. Starts saw a larger decrease for the quarter down 10% for the year with the largest decline (23%) expected in Pinal County. The Northeast Valley continues to see the strongest starts growth year over year with an increase of 37.4% (860 starts). Closings over the last four quarters are also trending down to 10,891; though we had hoped that closings would remain flat for the quarter we are now trending down 5.9% for the year.

MLS listings continue to remain flat for the year with 23,195 listings in September. We are seeing higher listings than 2013, up 13%. Though sales have been down 13.86% from June 2014, we are still way below a normal resale market of 5-6 months of supply. The market is currently holding 3.9 months of supply. Days on market have been holding steady at 84 days since the beginning of 2014. In September of 2013, the days on market were 61 days.

For the four quarters ending in 3Q14, single family annual MLS sales numbered 71,972 units, down 14.8% from one year ago. The median price of a single-family home sold through the MLS dropped slightly in September reaching $199,000, a 4.7 percent increase from twelve months ago. The average price per square foot is trending down as well at $125.83 as reported by the Cromford report. Just as we are seeing in the new home market, it is no longer a seller’s market.

“The story remains much the same in the SE Valley, which is outpacing other submarkets by leaps and bounds,” said Rachel Cantor, Director of Metrostudy’s Phoenix Region. “Nine of the top 25 master planned communities in the Phoenix market are located in the SE Valley which includes The Bridges, Morrison Ranch, Eastmark, and Adora Trails. Though the starts look good, most builders that are sitting in subdivisions such as Eastmark or The Bridges are not currently feeling the wonders of being in the top 25 communities. The competition is constantly changing as builders fight to meet their end of year numbers and move specs in these communities. Buyers are attracted to this market for a number of reasons and though builders may not be happy in these subdivisions now is the time to start thinking about replacement projects. Price pressure is expected through the end of the year and builders should start looking at 2015 and 2016 projects to ensure proper product placement and pricing.”

The overall inventory of vacant developed lots (VDL) continues to rise in Q314. The total of 54,309 vacant lots includes all product types, including attached product as well as custom lots. Though VDL inventory has seen minor growth year over year currently 5% from Q3 2013 it has been on an upward trend. Through most lots are in the outlying areas of Pinal County and the SW Valley, reviewing existing positions and timeline for lot deliveries is going to be critical in 2015. Planning lot deliveries and subdivision close-outs in highly competitive areas like the SE Valley will help builders begin to review purchases for lots in 2016 and 2017.  As builders continue to struggle with sales across the valley we have expected to see more finished vacant inventory on the ground this quarter. We actually tracked only 1 percent growth Q3 over Q2. The number of newly built finished vacant units totals 2,550, which is up 20 percent from one year ago.

“As advised previously during the year, we advise builders to approach 2015 with caution,” said Cantor. “With mixed signals comings from buyers within the Phoenix market and no strong indicators for job growth or major mortgage changes it is time to prepare for only moderate growth of 10-15 percent until 2017. Though the lower down payment requirements will probably help some buyers with their purchase, I do not expect this to bring buyers out of the woodwork. With the increase in interest rates now being pushed until end of 2015 to early 2016 and millennials not expected to begin purchasing until 2017 micro awareness of your target buyer and segment is extremely important for builders over coming year. For now, as we wait for the year to close out, expect to see more incentives but very little changes in base pricing.”

For information contact:
Rachel Cantor
480.588.1585
rcantor@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.

A Year of Rebalancing Leaves Buyers on the Fence

Posted in Phoenix - Tucson Market | Posted on 08-12-2014 | Written by Metrostudy News

Metrostudy’s survey of the Phoenix housing market indicates that initial expectations for 2014 were overly optimistic, and we expect to see the market down 5% for the year.   Our 2Q14 survey shows that home starts, attached and detached, in the Phoenix area numbered 11,270 over the last four quarters. The Northeast Valley continues to see the strongest starts growth year over year with an increase of 53.3% (857 starts). Closings over the last four quarters are also trending down to 10,981, a slight decrease of 2.5%.

MLS listings are down to 23,099 listings in June when compared to our market a year ago we have seen listings increase and sales decrease.  These seems necessary in order to get a stronger resale market in June 2013 the market was sitting a 2.1 months.  Now we are seeing stronger numbers at 3.7 months. A normal resale market carries 5-6 months of supply. Just as the new home market has experienced, appreciation has start to slow with only a 2.5% increase in median price over the last quarter. Days on market have been holding steady at 82 days for the past 3 months.

“For the four quarters ending in 2Q14, single family annual MLS sales numbered 73,938 units,” said Rachel Cantor, Regional Director for Metrostudy’s Phoenix office. “This is down 12.7% from one year ago, but it still represents a large volume of transactions. The median price of a single-family home sold through the MLS reached $200,000 in June, a 7.1% increase from twelve months ago. Though listings are increasing and sales are decreasing we do feel that some of this is just due to market stabilization.”

The Top Ten Builders in Phoenix Hold 59% Market Share of Closings. See The Top Ten Phoenix Builders based of Metrostudy’s 2Q14 Survey Findings

10 ten builders phoenix 2q14

 

The SE Valley continues to dominate in starts with 3,901 for Q2 and with 35% of the starts coming from this market.  Though boasting larger start numbers more builders have initiated decreases in base selling prices and higher incentives to attract buyers to their communities. The competition is fierce in the master planned communities with multiple builders. Buyers are attracted to this market for a number of reasons and builders are looking to replace lots in this corridor. Land prices in this corridor have skyrocketed and though builders would like to stay in this submarket the land pricing has to adjust. With no appreciation expected for the remainder of the year builders are wondering how to make the next deal in this area work for them.  The Northwest and Northeast Valley continue to be strong markets but keep your eyes peeled on the Central Valley as builders start testing the waters of new product in this market.

“The hottest market is the Northeast Valley, where starts grew by 54% from June 2013 numbers,” said Cantor. “Closings are now feeling the impact of the slow spring selling starts for the year. Though only a 2.5% decrease being felt across the market with positive numbers being seen in Northeast and Central Valley.”

The overall inventory of vacant developed lots (VDL), or finished lots, continues to rise in Q2. The total of 54,177 vacant lots includes all product types, including attached product as well as custom lots. With the decrease in starts we are starting to see movement upward with the total market now sitting on 57 months of supply, well above equilibrium range of 24 months. A majority of the vacant developed inventory is in the Southwest Valley and Pinal County. With these two markets maintaining 29,369 lots, 54.1% of the total finished lots the market appears heavy in finished lots. Taking out these two markets, the finished lots count is more equalized. We are still slightly above equilibrium at 36 months of supply but it explains what builders are feeling. Finished lots in the more desirable locations are decreasing and replacement lots with higher costs and thus higher home pricing may not be possible with the low appreciation expected for the remainder of the year. The SE Valley has the lowest months of supply at 31 months.

With nearly all of the finished lots in the more desirable parts of town under builder control, proper tracking of future lots is of utmost importance. As builders continue to struggle with sales across the valley we have expected to see more finished vacant inventory on the ground this quarter. The number of newly built finished vacant units totals 2,530, which is up 26 percent from one year ago. Months of supply grew from 2.01 months in 2Q13 to 2.76 months as of 2Q14. This is considered to be just above normal, and the upward trend is a concern that should continue to be monitored.

We should see a decrease to around 11,000 starts for 2014, 5% lower than the 2013 numbers.  The expectation is that what is occurring is a balancing within the market. Caution is advised as builders begin to make their plans for 2015. “With no strong indicators of changes in the Phoenix economy, my expectations for the next year will be moderate growth of 10-15% in starts up to 12,200 and price appreciation in the 2-4 percent range if we see the continued scale back in pricing for the remainder of the year,” said Cantor. “If interest rates start to rise, we could see some positives in the latter part of the year if buyers decide to get off the fence and buy.”

For information contact: Rachel Cantor @ 480- 588-1585
rcantor@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.

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

 

Metrostudy Names Rachel Cantor Regional Director, Phoenix Market

Posted in National Housing Market, Phoenix - Tucson Market | Posted on 06-30-2014 | Written by Metrostudy News

Washington, D.C. – July 1, 2014: Metrostudy, a Hanley Wood company, announced today the appointment of Rachel Cantor as regional director for Metrostudy’s Phoenix market.

Cantor joins Metrostudy with over 10 years of residential and commercial real estate industry experience in the Phoenix market.  She has held senior level positions in acquisitions and development with national home builders in the area. She is most recently from J. P. Morgan Chase, where she focused on commercial site strategy for Card and Mortgage Banking services.  Her deep experience and relationships in the homebuilding and financial communities will continue the Metrostudy tradition of expert advice and insight to the Phoenix market.

“I am excited about this opportunity it is a chance to combine my passion for homebuilding and helping clients understand the real estate market.  Metrostudy’s changes to the Insight platform, our mobile tool, can’t be matched in the market and I am thrilled to be a part of this organization and plan our future,” said Cantor.  Rachel will oversee all operations for Metrostudy’s Phoenix market, including consulting with builders, developers and financial institutions regarding housing and economic market conditions.

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.

Phoenix – Get Mobile with Insight!

Posted in National Housing Market, Phoenix - Tucson Market | Posted on 06-12-2014 | Written by Rachel Cantor

Metrostudy’s Insight tool has a new look for 2014.  Now you can search, track, and validate numbers in the field all from your mobile device.  Want to know what is going on around your existing subdivisions? You can select radius searches and see information on starts, closings, and vacant developed lots all with the touch of a button on your mobile device.  Let’s take a look at Maricopa County.  You want to know the top 5 subdivision’s by starts.  Vistancia, Adora Trails, Eastmark, The Bridges at Gilbert, and Verrado round out the list.  You can search and pull reports by postal city, census place, school district, county, and zip code. Take a look a property analysis and find your next land deal at the push of a button.  Want to draw your own search area?  Now you can with our new drawing tools help narrow down your competition and see how they are trending in your defined search.  Save your reports while in the field so you can download and print when you return to the office.  See how this new tool can complement other services we now offer!

For more information on this exciting tool click here

Phoenix Housing Market Metrostudy 1Q14 Survey Results: Market Traffic Positive in 2014; Competition Driving Builders to Incentives

Posted in Phoenix - Tucson Market | Posted on 05-14-2014 | Written by Metrostudy News

May 14, 2014: Builders saw positive traffic during the Phoenix spring selling season, but competition has builders scratching their heads on how to keep their market share.  Price decreases occurred but only 8% of the 6,000 plans tracked by Metrostudy saw the decrease.  The price changes that did occur were less than 5% of the base price.   Builders are leaning on incentives to limit changes in base pricing.  Though most plans remained flat quarter over quarter there was still growth and builders did see price increases across 38% of plans in the Valley.

The Southeast Valley continues to dominate in starts but, despite its larger numbers, competition has been fierce in this market. Though home prices are still slightly on the rise it appears the market has reached the price threshold. The 4,006 home starts in 2013 are down 5.5% from the previous year. The Northwest Valley is the next most active market area with 2,352 annual starts ending 1Q14, up 1.7% over the previous year.  The hottest market is the Northeast Valley where starts grew by 374 units or plus 86.2 % from March 2013. Growth slowed in this submarket over the first quarter but still had positive growth of 22.7% over 4Q13. Closings improved across all markets except the Southeast Valley. As annual closings improved 2.4% over the same quarter last year the Southeast Valley was the only submarket to slip in closings numbers.

According to Metrostudy’s 1Q14 survey of the Phoenix housing market, home starts, attached and detached, in the Phoenix area numbered 11,734 over the last four quarters. Metrostudy expects the market to remain relatively flat for 2014 and though sales traffic has been up for the year the conversion rate was 3.79% through April as reported by builders.

In hopes of a strong spring selling season builders started more homes in 4Q 2013.  This push has resulted in a larger number of newly built finished vacant units.  The total of 2,473 is up 23 percent from one year ago and currently represents 2.6 months of supply.  Not a concern at this point just a watch item for builders in the upcoming quarters.

“Based on concern regarding future demand and high land prices, many builders have been renegotiating existing land deals or cancelling contracts,” said Rachel Cantor Regional Director of Metrostudy’s Phoenix-Tucson Market. “Though it is still a seller’s market, there is less room for land price growth as builders review their current land strategies. Increased competition and buyer qualification appear to be at the center of slower sales.”

The Phoenix economy, measured by job growth, is continuing to expand. Employment is up 2.2 from March to March, an additional 39,900 jobs during that time. Phoenix is still ranked in the top 10 among all metro areas in terms of year-over-year growth, with strong growth expected in the professional/business and health sectors. Unemployment as of March stands at 6.4% (not seasonally adjusted), slightly below the national unemployment rate of 6.7%.

“The first quarter of 2014 was a slow start but we have some positive indicators for the remainder of the year,” said Cantor. “We do not expect to see growth in 2014, as previously estimated starts will take a dip in 2Q14 as builders work through the standing inventory. Closings should remain flat as well but we should keep an eye of the positives occurring in the resale market. It is noteworthy that our market still carries fewer homes than we would expect in a normal market with only 3.8 months of supply based on current sales. With a drop in distressed indicators the expectation is sellers have equity and with that hopes to purchase new home. With strong increases in consumer spending and consumer confidence we can expect that new home sales will be next. Buyer financing is still the wild card and though no one likes higher mortgage rates; an increase could stimulate buyers to make a move.”

For information contact: rachel cantor @ 480.588.1585
Email rcantor@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.

Homebuilding activity ahead of last year, but below expectations

Posted in Phoenix - Tucson Market | Posted on 07-18-2013 | Written by Metrostudy News

(Phoenix, AZ – July 18, 2013) The Phoenix homebuilding market is improving and will continue to improve, but many in the industry expected more activity this year. 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.

Like the nation, the Phoenix economy is expanding at a consistent if not spectacular pace. Employment is up 2.6 % from June to June, or plus 44,200 jobs during that time. “This ranks Phoenix in the top 10 among all metro areas in terms of year-over-year growth, but we have recovered only 45 % of the jobs that were lost to the recession,” said Ben Sage, Regional director of Metrostudy’s Phoenix – Tucson Market. Unemployment as of June stands at 7.2% (not seasonally adjusted). This is down modestly from 7.6 % one year ago, but the labor force has grown since last year. More people entering the workforce is a positive sign.

According to the Metrostudy quarterly survey, annual home starts, attached and detached, in the Phoenix area numbered 11,773 ending 2Q13. This is up 35 % from a year ago, but the pace of improvement has slowed since starts increased 67 % during the calendar year 2012. Starts in 2Q13 alone numbered 3,225, which is up 4 % from 2Q12. “Builders are reporting an average of less than 4 sales per month year-to-date, which is right in line with last year on a persubdivision basis. For the most part, though, builders had higher expectations heading into 2013,”said Sage. Annual new home closings, or “move-ins” by Metrostudy methodology, were up as builders closed 11,246 units during the year ending 2Q13. This represents an increase of 30 % from one year ago, which is in line with the increase in starts.

The overall inventory of vacant developed lots (VDL), or finished lots, declined 11 % over the past year to 53,060. This is for all product types, including attached product as well as custom lots. The decline combined with an increase in starts has allowed supply of VDL to fall to 54 months. This is well above equilibrium range of 24 months, but it is down from 135 months two years ago. “This illustrates how quickly supply measures can drop when lot absorption increases. It is important to note that supply varies significantly by geography and product type,” said Sage.  For example, lot shortages exist in Chandler, Gilbert, Peoria, and Surprise.  Metrostudy has the only field-verified count of vacant developed lots, commonly referred to as finished lots.

Regarding new-home inventory, the number of finished vacant units totals 1,891, which is largely unchanged over the past four quarters. With closings on the rise, however, the relative supply of finished vacant units is down to 2.0 months, which is within equilibrium range. “There is evidence that builders constructed a few spec homes earlier in the year, but demand has been strong enough to keep builder inventory well under control,” said Sage.

“Metrostudy had forecast an increase in starts of 25 % in 2013, or about 14,000 units. With first-half starts up only 13 percent and the spring selling season behind us, it does not appear Phoenix will reach that level. Even so, our forecast will be one of the most accurate as most were expecting even larger increases. Sales to investors was part of last year’s surge, but builder price increases helped stem that tide. Now we are back to true demand, which is still well up from two years ago,” said Sage.

For information contact:
ben sage @ 480.756.9300
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, 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.

What in the Dickens is Going on in Phoenix?

Posted in Phoenix - Tucson Market | Posted on 05-21-2013 | Written by Ben Sage

“It was the best of times, it was the worst of times.”  The introductory line to Charles Dickens’ A Tale of Two Cities is one of the most recognized phrases in literature.  It is also an appropriate description of the last business cycle and undoubtedly a great theme to tie into the Phoenix housing market.  There is only one problem here … I’ve never read A Tale of Two Cities so I am at a loss to elaborate much more beyond that famous first line.  While most of my friends read that story for school, my English teacher had us read another Dickens classic: Great Expectations. Read the rest of this entry »

Phoenix First Quarter Starts Up 28% Over Last Year

Posted in Phoenix - Tucson Market | Posted on 04-30-2013 | Written by Metrostudy News

(Phoenix, AZ – April 30, 2013) The Phoenix new-home market went from 6,630 starts in 2011 to 11,102 starts last year, a 67 percent increase.  Many in the industry have high expectations for continued improvement this year as well.  According to Metrostudy’s lot-by-lot survey of new-home subdivisions, there were 2,463 field-verified starts in the first quarter of 2013.  This is up 28% from 1Q12 when the industry started 1,920 units.  “It is early in the year, but Phoenix is starting 2013 in line with Metrostudy’s expectations,” said Ben Sage, Director of Metrostudy’s Arizona region.  “For those expecting starts to increase at a similar pace as last year, these early returns may be a bit disappointing.”

New-home construction has been particilarly strong in the Southeast Valley, which accounted for 37% of all starts over the past year.  This is beginning to trend down, however, due to rising prices and a shortage of vacant developed lots.  “The Southeast Valley, particularly Gilbert, has carried the banner for homebuilders over the last two years,” according to Sage, “But its market share is expected to decline in the near term – not due to a lack of demand – but a lack of supply.”  The Central Market Area saw the largest increase in starts from 1Q12 to 1Q13, rising 95% from 173 units last year to 338 this year.  D.R. Horton has been particularly active in Vinsanto and Hurley Ranch, both on the near west side of town.

Every quarter, Metrostudy tracks the inventory of new homes that are finished but vacant.  These units may or may not be under contract, but this indicator is a key diagnostic measuring the health of the new-home market.  Finished vacant inventory increased in the first quarter by 172 units or plus 9%.  The total number of finished vacant units is now 2,003, which represents 2.2 months of supply.  This is close to equilibrium range, so the increase is not a major concern.  It indicates, though, that builder sentiment was strong enough that many tried to get ahead of demand by building some specs early in the year.  Sage said that “Builders should not have any trouble getting these units sold.”

The number of vacant developed lots, or finished lots, in the Phoenix area numbers 53,838.  This is for all product types, including attached product as well as custom lots.  The most active builders want lots that aren’t too small or too big, and there are only 37,195 vacant developed lots in that big-builder size range.  These would last 48 months, which is above equilibrium, but half of Metrostudy’s Phoenix-area submarkets are under-supplied with vacant lots.  According to Sage, “It is no secret that Chandler, Gilbert, and Peoria need more vacant developed lots, but many would be surprised to learn that more land development is needed in Surprise, Goodyear, and Queen Creek.”

See rankings and more about Metrostudy below.

Starts By Community

The new-home communities that generated the most new-home starts during the year ending 1Q13 were as follows:

  1. Palm Valley (Goodyear) – 314 starts
  2. Hastings Farms (Queen Creek) – 309 starts
  3. Vistancia (Peoria) – 284 starts
  4. Ironwood Crossings (Queen Creek) – 261 starts
  5. Power Ranch (Gilbert) – 261 starts
  6. Verrado (Buckeye) – 246 starts
  7. Estrella (Goodyear) – 227 starts
  8. Surprise Farms (Surprise) – 225 starts
  9. Freeman Farms (Gilbert) – 213 starts

10.Fireside at Norterra (North Phoenix) – 203 starts

Starts By Submarket

By a wide margin, Gilbert remains the top submarket for new home activity.  Annual starts in Gilbert are up 20% from one year ago, and it now accounts for 18% of all starts in the metro area.  Here are the Metrostudy submarkets ranked by new-home starts during the year ending 1Q13.

  1. Gilbert – 1,962 starts
  2. Queen Creek* – 1,301 starts
  3. Phoenix – 1,058 starts
  4. Goodyear – 902 starts
  5. Mesa – 892 starts
  6. Chandler – 886 starts
  7. Peoria – 760 starts
  8. Buckeye – 726 starts
  9. Surprise – 534 starts

Note: These are based not on incorporated city boundaries but on zip codes associated with specific cities

* Queen Creek includes San Tan Valley in Pinal Co.

Active Adult Market

Starts in active-adult communities are lagging the traditional market.  There were 904 starts in this market segment during the year ending 1Q13, which is up 15% from a year ago (compared to plus 56% overall).  The share of active-adult starts has declined from 13% two years ago to 8% currently.  The top active adult communities in terms of starts over the past year include:

  1. Sun City Festival – 141 starts
  2. Trilogy at Vistancia – 140 starts
  3. Sunland Springs Village – 115 starts
  4. PebbleCreek – 90 starts
  5. Sun City at Anthem at Merrill Ranch – 88 starts
  6. Canta Mia at Estrella – 76 starts
  7. Province – 70 starts
  8. Trilogy at Encanterra – 48 starts
  9. Robson Ranch – 42 starts

10.Mission Royale – 36 starts

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. www.Metrostudy.com

About Hanley Wood

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

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 »