(Raleigh, NC– May 9, 2012) The Triangle’s new home market is still in recovery mode, 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 Triangle and US housing market.

1,458 new homes began construction in the Triangle in 1Q12, up 10.7% from 1Q11. Closings were also up. According to Metrostudy 1,395 new homes were closed pm in 1Q12, up 11.7% from 1Q11. “Closings continue to outpace new home starts, and thus inventory has continued to be reduced across the region,” said Jay Colvin, Director for Metrostudy’s Triangle Region.

Total inventory of homes in all stages of construction – Models, Under Construction, and Finished Vacant – was reduced to 4,053 homes on the ground as of 1Q12, or 8.6% lower than the same time a year ago. At the current closings pace, these units represent an 8.1-month supply of homes, which is the Triangle’s 13 year average. Finished Vacant homes are at a 13 year low with 1,795 homes on the ground. “The reduction in inventory is critical for buyers and sellers. Fewer homes available for purchase means prices are starting to stabilize, and in a few instances, this is enabling builders to increase the base asking price for new homes,” said Colvin.

“The majority of new homes under construction today, are pre-sold, meaning that homes are being built for a specific buyer who has already made the decision to buy that home. So the actual number of ‘for sale’ new homes is very low,” comments Colvin. “The sense of urgency created by lower supplies, and in some cases higher prices, is something that the housing market has been waiting a long time for, and is a really good sign that the market is getting back on solid footing.”

For information contact:
Jay Colvin @ 919.461.9618
jcolvin@metrostudy.com
Metrostudy Director Triangle Region

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 collected by a staff of 650, the company is recognized for its consulting expertise on 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.

ESPN actually has a show with commentary and analysis of sporting events based solely on historical statistics which is named “Numbers Never Lie”.  Depending on the perspective, numbers can say a lot of things. ESPN knows this, thus the title of their show uses an asterisk after the “never”.

Recently an article appeared in my inbox with a headline, “Raleigh-NC Newest New Homes Sales Numbers Give Hints Market Decline is Deepening”. The headline caught my eye, and so I read the article.  It appears to me that the headline and article was based on deed transactions (Cary-Raleigh MSA only-see next paragraph), which may have well documented reporting time lags.

Also, the Triangle New Home market, driven primarily by the Research Triangle Park, employment engine, is actually comprised of the Raleigh Cary MSA and the Durham-Chapel Hill MSA.  This fact is well known among local market experts.  Only the Raleigh-Cary MSA was referenced in the article.  Thus 28% of the Triangle New Home marketplace was missing from the article which in our view made the headline and article suspect.   Since 1998 Metrostudy has been driving the entire Triangle New Home market each quarter and providing the market with true local expertise and analysis. Metrostudy’s fourth quarter survey showed starts in the entire Triangle New Home market in the final 3 months of 2011 were up nearly 10% over the same time period 2012 (1,173 vs. 1,070), a sign that the market is actually improving.

Multiple sources of market intelligence can be a prudent decision making tool for businesses.  However, it is critical to be sure that the methodology and local expertise are made known to the reader of the numbers.  In our view, the headline in the article using only one MSA and deed records was sensational, while lacking the proper perspective.

As the Triangle new home market continues to improve, which we and all of you reading this are hoping, it is imperative that real time, local expertise drives your market intelligence.  Metrostudy has this available in the Triangle from our quarterly survey, along with deed records.

A cottage industry of new home information experts has developed during this prolonged housing recession.  Please encourage your company to question the methodology being used by all firms to write headlines and prepare “expert” local intelligence.

(Raleigh, NC– February 1, 2012) The Triangle housing market fared well despite the economic environment during 2011, 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.

During 2011, the Triangle started 5,464 new homes, 6.5% fewer new homes than 2010, a year greatly influenced by the New Home Tax Credit. The drop in starts resulted, as expected, in a drop in annual closings, which were down 11.6% compared to 2010. “While the final tally of starts and closings were down from a year ago, new home construction activity at all levels in 2011 was respectable when viewed through the lens of another challenging economic environment,” said Jay Colvin, director of Metrostudy’s Triangle Region.

New home inventory represents an 8.4-months’ supply of homes, slightly higher than the Triangle’s long term average of 8 months, according to Mr. Colvin. “Home inventory levels are getting back to their historical levels and home builders are feeling some optimism. These are signs of a stabilizing Triangle home market in 2012. Which is expected to help prices level out, and give home sellers something to look forward to,” said Colvin.

The 10,600 jobs that the Triangle added for the 12 months ending in November was a major factor keeping the Triangle near the top of many Best City lists (Forbes, Businessweek.com), “In 2011, the fundamentals for housing—namely job growth—resumed trends that have made the Triangle a jewel of the home building industry,” said Colvin. Colvin warned that the industry is not out of the woods yet. “Unemployment remains high, global economic forces are still worrisome, and election years always add some uncertainty. Demand for new homes will rely on continuing signs of economic improvement in 2012,” said Colvin.

For information contact:
Jay Colvin @ 919.461.9618
jcolvin@metrostudy.com
Metrostudy Director Triangle Region

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.

(Raleigh, NC– November 1, 2011) The Triangle housing market showed positive signs during 3Q11, 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.

“Job creation slowed but stayed above the water, mirroring national trends,” said Jay Colvin, director of Metrostudy’s Triangle Region. 2,200 jobs were created over the past 12 months. Unemployment remains below state and national levels.

So far this year the Triangle has seen growth in construction starts, and while closings remain on a downward slope, inventory reduction continues. During 3Q11, the Triangle started 1,583 units, 4.4% more than 3Q10 and 12.5% more than 2Q11. Closings totaled 1,569 units, down from 1,778 during 3Q10, but 9% higher than 2Q11. “In order to meet demand starts will eventually have to outpace closings. While this may be a few quarters away, the light at the end of the tunnel is growing brighter by the quarter,” said Colvin.

Total inventory of homes in all stages of construction remained at 4,452 units on the ground, only a one unit change from 2Q11. At the current closings pace, these units represent an 9.2-months’ supply of homes. “The controlled inventory levels are the most noticeable sign that the new home building community is avoiding over supplying the market with new homes,” said Colvin.

“The market remains in the buyer’s favor, while builders are gaining ground as evidenced by the reduction in inventory,” said Colvin. “The industry is poised for a comeback, however strong national and global economic headwinds are hindering buyer confidence. The buyers in the market today are being driven by investment savvy and fundamental housing needs.”

For information contact:
Jay Colvin @ 919.461.9618
jcolvin@metrostudy.com
Metrostudy Director Triangle Region

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.

European Debt Worries… Directionless Stock Market… Fears of a Double Dip Recession. Lately these are the only things that you hear or read about from news outlets. It seems like every day there is some new revelation or setback in the “Europe Problem” – perceived as “the next shoe to drop” (how many shoes is that now?). The stock market sways back and forth depending on the fears or joys of the day, and all the while economists sprinkle confidence-crushing headline grabbers hinting towards a “double dip” recession. These are serious matters and many people’s lives are being affected by this…..and for that my thoughts and prayers are with them.

But when experts say a double dip recession is going to hurt an already depressed new home market, I say “huh?!” The unemployment rate is still very high in the United States. Job creation hasn’t been exactly earth shattering, and consumer confidence is in the dumps. So, if the measure of growth for an economy has a negative reading, then the Americans who are thinking of purchasing a new home are going to push their plans back? I challenge you to ask anyone currently out of work, or underemployed, if they are thinking about buying a new home. I bet you won’t get many positive remarks. But, still new homes are being built and sold all across the U.S.

This is because the new home industry in America is back to sustainability. New home starts across the country are released each month by the census bureau (the validity and accuracy of which has been discussed to great lengths on this blog) which shows some stabilization in new home starts. Internally here at Metrostudy, our own proprietary survey of new home starts across the nation have been showing similar signs of stabilization in new, single family home starts with some markets increasing, all the while “eating into” the excessive inventory left over from the boom. By the way, the new home market has over come most of its inventory problems – and what’s left is not exactly arm’s length transaction material. This is happening post Tax Credit policy, and in an economic and political landscape that is shaky at best.

What does this mean for the housing industry?

It says that the industry is meeting current demand, and that means a major decline in housing starts is unlikely. The industry has been dealing with many different forms of competition – internally with other builders seeking market share from each other and the existing home market, a financial industry that is pulling out of the real estate market and weak confidence in the housing market and the economy in general. Having said all that, the industry is still here, building and selling homes. Maybe not as many or at the margin desired, but that’s a discussion for another day. There will always be new home buyers. Some people just like new versus old, and that isn’t going to change. If it were, then we would have seen new home starts drop to zero in 2008. We didn’t because it didn’t happen. Instead the industry took its lumps, did what it needed to do to remain in the game, and is now in a position to move forward.

(Raleigh, NC– August 1, 2011) Despite strong negative economic headwinds quarterly new home starts in the Triangle increased for the third straight quarter in 2Q11 to 1,412, Jay Colvin, Metrostudy Director Triangle Region told Metrostudy’s clients at their 2Q11 Quarterly Executive Briefing.

The 1,412 quarterly starts during 2Q11 across the Triangle is a 7.9% increase over 1Q11. Closings totaled 1,443 units, up 15% from 1Q11. “Year over year comparisons in the first half of the year will be hard to define trends from, because the market is still being compared to the increased demand from the Home Buyer Tax Credits of 2009 and 2010. The increase in starts over the past three quarters, although small, is consistent with yearly trends for these time periods. Anything that you see resembling normalcy is a positive sign,” said Colvin.

At current closings pace, total new home inventory has an 8.9-months’ supply of homes, which is near the 11 year Triangle average of 7.9-months’ supply. Increases in inventory during the first six months of the year which is the prime selling season for new homes is another sign that resembles normalcy. “Builders throughout the Triangle are doing a good job of matching inventory to demand”, said Colvin. Controlling inventory of new homes will help stabilize prices.

Triangle job creation slowed in 2Q, delaying opportunities for potential buyers to relocate to the area. “Job creation remains the most important driver for new home construction. It creates demand, removes uncertainty from the economic environment resulting in improved consumer confidence, that translates into improved new home sales”, said Colvin, in his closing remarks.

For information contact:
Jay Colvin @ 919.461.9618
jcolvin@metrostudy.com
Metrostudy Director Triangle Region

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.

(Raleigh, NC– May 4, 2011) Job growth is helping to maintain the new home market in the Triangle, 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 Triangle has gained over 17,000 jobs over the previous year, for a growth rate of 2.24% annually. This is the fastest rate of job growth the Triangle has seen since the early 2008. “The national and local employment picture is getting brighter,” said Jay Colvin, director of Metrostudy’s North Carolina Region. “The Triangle’s ability to add jobs over the last year, and the efforts of the local housing industry towards inventory reduction, has kept the area at the top of many national polls concerning housing market health.”

Inventory increased slightly to 4,492 units, the first quarter over quarter increase since 3Q07, resulting in an 8.4 month supply of new homes. “Metrostudy sees the increase in supply as a positive, especially when combined with reductions in the supply of finished vacant inventories. The increase in activity shows increased confidence from the market participants,” said Colvin.

Starts during 1Q11 were at 1,322 units, a 14.4% decrease from 1Q10 but a 23.3% increase from 4Q10. Closings totaled 1,253 units, down from the 1,355 recorded in 1Q10.

Annual Closings and Starts are the sum of the past four quarters. 1Q11 Annual Starts of 5,630 were 3.6% less than the year prior. Annual Closings in 1Q11 of 6,454 were recorded over the previous 12 months, a 10.8% decrease over the prior year.

As the market begins to stand on its own two feet, relying on overall market economic fundamentals not tax credits Metrostudy expects the pace of housing activity to show increases. The rate of growth will be based on organic and fundamental factors like job creation, household creation, and affordability,” said Colvin.

For information contact:
Jay Colvin @ 919.461.9618
jcolvin@metrostudy.com
Metrostudy Director Triangle Region

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.

In the U.S., apartments and for rent housing have been traditional incubators for new home sales. Several factors contribute to renters becoming attracted to the idea of home ownership. These factors range from the simple desire to own a home, a growing family, and most importantly the value factor. As rents rise, the opportunity cost of renting versus buying a home can increase, and a renter makes the decision to buy, traditionally, an affordable first-time, homebuyer product.

During the housing boom, the availability of low cost financing made it easier than ever to buy a home versus renting. Creative financing, made it easier for the average person to skip – or shorten greatly – the renting process and jump right into a new home.

The housing correction caused many people to lose their homes and once again become renters. The part of the pool of renters that have lost homes due to foreclosure is an important group because they represent longer term renters. At the same time the correction has encouraged prospective buyers who were not affected by the recent downturn to put off purchasing a new home and continue to rent. Another way of saying that is – prospective home buyers have been discouraged to purchase homes because the excess supply of for rent product has kept rental rates very competitive. That is starting to change. National vacancy rates are currently at 6.2% according to Reuters (http://reut.rs/icnNwV ), which is considerably lower than the figure of 8% we saw at this time last year, and rental rates are slowly increasing. The Triangle is following the trend and has witnessed increased activity in this sector. According to the apartment research firm Real Data, the Raleigh-Durham region’s apartment vacancy rates are at 7% and the average rental rate is $794 (http://bit.ly/fTWYFG ).

As the supply of rental units decreases, landlords are able to raise rates. The rule of thumb in the apartment market is that if occupancy rates in a region are above 90% there is strong enough demand that rental rates should be increased; at the same time it is a queue to the development world that there is a need for greater supply. This has already begun to happen in scattered markets around the country like the Triangle. Real Data estimates that there are nearly 4,000 new units in the approval process right now in the Triangle – that is nearly three times the amount that is currently under construction, and ten times the construction activity just 6 months ago. Much of this construction will be financed by banks which have been unable to make single family construction loans, but have been actively pursuing other avenues of financing. Construction companies and subcontractors, which have been some of the hardest hit groups in the downturn, are also encouraged by the renewed activity in the multi-family sector because they are able to maintain a steadier work load and employ more construction personnel.

The new home industry continues to face stiff headwinds. However, there are factors at work that will contribute to the absorption of excess housing supply, and encourage sustainable housing growth in the future.

Metrostudy 1Q11 Private Client Executive Briefing

“2011 – Finally a New Year !!!”

Wednesday, May 4, 2011

McKimmon Center NCSU

Continental Breakfast:  8:45 AM – 9:30 AM

Executive Briefing :  9:30 AM – 11:00 AM

(Raleigh, NC– February 9, 2011) The Triangle new home industry started 12% more homes in 2010 than in 2009, the first year over year increase since 2005, according to Metrostudy’s 4Q10 Residential Survey presented at their 4Q10 Triangle Customer Executive Briefing, Tuesday, February 8 at the McKimmon Center, NCSU. “Continued positive job growth, fundamental national, state, and local economic improvement and sustainable inventory levels point to sustainable growth in the coming year without the help of tax credits”, said Ed Dunnavant, Senior Consultant Metrostudy Triangle Region.

While 2010 total new home starts of 5,841 were lower than the 16,426 recorded in 2005, the 12% increase is significant in that it is the first year over year increase since 2005. It is also 16% higher than the annualized low (sum of the past four quarters) of 5,036 recorded in 3Q09.

“With supply levels across most price points returning to equilibrium, the stage is set for greater production over the next year,” Dunnavant told Metrostudy’s customers. During 4Q10, total inventory of homes in all stages of construction decreased to 4,410. The total inventory represented an 8.1-month supply, no change from the 8.1-month supply in 3Q10. The 2,643 units of finished vacant inventory was a slight increase from the 2,581 at the end of 3Q10.

“The slight increase in finished vacant supply should not be viewed negatively as builders must begin construction in late fall to provide available inventory for buyers looking for housing in the spring – typically the most active time of the year for buyer activity,” Dunnavant cautioned the attendees.

Raleigh-Durham has not experienced the large levels of excessive inventory and foreclosures that have plagued many headline markets over the past several years. These markets now even appear to be exhibiting signs of stability. Because many of these markets are major feeder markets for the Triangle positive headlines in these markets will have a positive impact on sales and consumer confidence in the Triangle” Dunnavant said.

The Triangle has been gaining jobs over the last several months, while lowering the local unemployment level. “Markets where job growth is evident will be where demand for housing is strongest in 2011, thus, the Triangle will remain among the top new home markets in the country as positive job growth is expected by all local experts”, were Dunnavant’s closing remarks.

For information contact: Ed Dunnavant
email : edd@metrostudy.com
Direct Line: 919.314.2782
Mobile: 919.605.7637

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.