Metrostudy Market Analysis: Raleigh, North Carolina

Posted in National Housing Market, Raleigh - Durham Market | Posted on 06-26-2014 | Written by J.W. Colvin IV

“Unless you want to compare notes about nepotism in real estate, or hear my life story, please skip to the 2:50 point in the video! What I was trying to lead up to was that North Carolina, and Raleigh/Durham (the Triangle to us “Locals”) in general is a great place to live, work and more importantly build and own homes. The local chamber has stated that much in just about every marketing publication and website for the last decade. Apparently, those efforts have paid off. Not only has the region rebounded from the Great Recession, but surpassed it, at least from an employment and population standpoint.

The new home market, has been a little more challenging. The positives that have driven people to the Triangle, have also attracted home builders. Lots and lots of homebuilders. The Triangle is one of the most competitive homebuilding markets in the country. The top 25 builders, only capture 62% of the demand. That Top 25 list is not just made up of the largest national home builders (13 of the largest market cap builders traded on the NYSE are here), but also by very large and competitive local and regional homebuilders.

Something that hasn’t been attracted to the market has been land developers, or at least in the traditional sense of the term, as most new development is either builder self-developed or fee-based development. There are very few retail/market lot developers in the region, meaning that the market is only replacing – or attempting to replace – what is already in short supply. Vacant Developed Lot supply is critically low in the region, and new lot development is not keeping pace with demand. This is in turn driving up prices on land and in turn homes, which is causing some prospective home buyers to remain on the side lines. The demand is here, and plenty of it. The supply, and the ability to increase supply, is not. This is the biggest challenge facing the Triangle’s and, in my opinion, the nation’s near-term future where housing is concerned.”

Raleigh is catching up to its pre-crash norms with just 25% of lot supply meeting housing demand this year. In this market overview from the 2014 Housing Leadership Summit, Metrostudy’s Jay Colvin explains that although this North Carolina market felt a similar downturn to the rest of the county with 65-70% decrease in volume, it has regained all jobs lost since the recession.



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

Rapids Ascent: Top 10 Cities for Raising Children

Posted in Raleigh - Durham Market | Posted on 03-05-2014 | Written by Metrostudy News

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What do you look for when raising a family? A 2014 study based on seven metrics (median income, cost of living, housing affordability, commuting delays, percentage of families owning a home, crime rate, and education quality) highlights the U.S. cities that are best for raising a family with young children. RealtyBizNews’ Brian Kline reports.

Read More Here

The Raleigh New Home Market Continues to Grow

Posted in Raleigh - Durham Market | Posted on 03-01-2014 | Written by Metrostudy News

(Raleigh, NC – March 1, 2014) The Triangle’s new home market has continued to recover, and is now moving into a more normal phase of development and construction activity. 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.

For the fourth quarter ending December 2013, the Triangle started construction on 1,988 new homes; a 1.6% increase over the number of homes started in 4Q12 (1,956). Quarterly Closings – previously unoccupied new homes that now are occupied – totaled 2,105 units a 6.4% gain over the 1,978 closings surveyed in 4Q12.

“New home construction has been driven by real demand as a result of job gains, population inflows and a relief of pent-up demand. The pent-up demand cycle is coming to a conclusion; moving forward the Triangle new home industry will need to focus on the tangible household creation events – focused on jobs – to drive further new home construction and sales gains,” said Jay Colvin, Regional Director of Metrostudy’s Raleigh market.

Total inventory – models, finished vacant unoccupied new homes, and new homes under construction – was surveyed at 4,932 units. This was an increase of 603 homes over the inventory surveyed in 4Q12, and 25% higher than the all-time low surveyed in 4Q11 of 3,940. Finished vacant inventory now stands at 1,494 homes (2.2 months’ supply). Under Construction inventory now stands at 3,200 homes (4.7-months’ supply), which is 24.1% higher than the 2,578 homes under construction in 4Q12.

The 22,620 vacant developed lots in the Triangle in 4Q13 represent a decrease of 4,086 lots from the 26,706 lots surveyed in 4Q12. At the current absorption rate, these lots represent a 31-months’ supply – the lowest since 2Q08. Metrostudy considers 18-24 months to be normal, as on average that, is the amount of time it takes to entitle and deliver new home lots to the market. “Not all lots share equal demand. In Triangle submarkets with the highest demand, lot supplies are well below equilibrium,” said Colvin.

“The Triangle housing market continues to show a lot of positives and signs of continued growth based on fundamental demand. These trends are expected to continue as the market moves out of the recovery mode and back into a traditional growth and pricing pattern,” said Colvin.

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.

North Carolina Triad Housing Market Rebounding

Posted in Raleigh - Durham Market, The Triad Market | Posted on 12-20-2013 | Written by J.W. Colvin IV

The Piedmont Triad in North Carolina has had a tough run the last decade. The region’s employment base has been hit hard by the move of textile and furniture companies – which drove the local economy for years – overseas. The lack of job creation has hit the housing market especially hard, but the lights are starting to flicker on.

Job creation is finally starting to perk back up. Over the twelve months ending in August, the three MSAs that comprise the area known as the Triad (Greensboro-High Point/Winston-Salem/Burlington) have added an astounding 11,200 jobs across. The gains have been spread across most sectors, with the largest gains in the Trade, Transportation, and Utilities sector. Unemployment has also made strides, now firmly below 10% at 9.1%. North Carolina’s state unemployment rate is 9.1% also.

Housing production has follow suit. Preliminary results from our proprietary third quarter market audit showed tremendous growth. Trailing four quarter starts are up 27% over the same period last year. Move-ins (observed closings) of new homes, which naturally lags starts, has increased 9% higher than last year. At the same time, finished vacant new homes, a key indicator of inventory health, has fallen 12% from the same time last year.

The increases in activity are concentrated in the highest demand pockets of the Triad, in communities with higher relative amenities within the best school districts as one would expect in this phase of a local market recovery, and builders in the market are still being very cautious about expansion in product and community offerings – a positive sign in this analyst opinion – but the signs of growth are certainly encouraging in a market that has been in hard times for a very long time.

The Triangle New Home Market Momentum Continues

Posted in Raleigh - Durham Market | Posted on 11-01-2013 | Written by Metrostudy News

(Raleigh, NC – November 1, 2013) The Triangle’s new home market continued to experience gains in construction and sales. 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.

Over the twelve months, ending September 30th, the Triangle started construction on 8,748 new homes, which was a 35% gain from the same period a year ago, when the total was 6,479 starts. Closings were up 24.7% in that same period. “Construction growth has been strong, and even with more homes being built as specs [homes built without previously signed sales contract], inventory has held steady, and even decreased in some parts of the Triangle,” said Jay Colvin, Regional Director of Metrostudy’s Triangle operations, “That’s a great indicator of the strong demand for new homes in the region.”

Total Inventory (Models, Finished Vacant, and Under Construction homes) represents a 7.5-months’ supply of homes. Seven months’ of supply is the level Metrostudy considers equilibrium in the Triangle. From 4Q99 through 4Q04 the Triangle had an average months’ supply of 7.9- months’.

The 23,057 vacant developed lots in the Triangle in 3Q13 represent a decrease of 3,778 lots from the 26,835 lots surveyed in 3Q12. At the current absorption rate, these lots represent a 31.6- months’ supply – the lowest since 2Q08. “Finding available lots for new home construction is still an issue,” said Colvin, “add to that labor shortages in the construction industry, and you get higher prices…if you’re a buyer now is a good time to do so.”

“The Triangle housing market continues to show a lot of positives and signs of continued growth based on fundamental demand. These trends are expected to continue as the market moves out of the recovery mode and back into a traditional growth and pricing pattern,” said Colvin.

For information contact:
Jay Colvin @ 919.461.9618
jcolvin@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 Triangle New Home Market Gains Driven By Real Demand

Posted in Raleigh - Durham Market | Posted on 08-14-2013 | Written by Metrostudy News

(Raleigh, NC – August 14, 2013) The Triangle’s new home market has continued to experience the gains in the first half of 2013 that it has seen over the past several quarters.  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.

Unemployment continues its downward trend, which is helping to increase consumer confidence and spur home buyers to action. Consumer confidence is now at its highest level since before the market down turn that started locally in 2007.

For the Second Quarter ending June 2013, the Triangle started construction on 2,460 new homes; a 42.1% increase over the number of homes started in 2Q12 (1,731). Quarterly Closings – previously unoccupied new homes that now are occupied – totaled 2,177 units a 29.3% gain over the 1,684 closings surveyed in 2Q12. Annual closings and starts are the sum of the past four quarters. The 8,274 annual starts surveyed through the end of 2Q13 was a 39.2% gain from the same period a year ago, when the total was 5,943 starts. The annual closings figure of 7,573 was 21.5% more than the 6,235 observed in four quarters leading up to the end of 2Q12. “New home construction has been driven by real demand as a result of job gains, population inflows and a relief of pent-up demand,” said Jay Colvin, Regional Director of Metrostudy’s Raleigh market, “Our market auditors drive by all the new home construction in the Triangle every 90 days, and the homes that are being built are being moved into by families and individuals, also many of the lots where homes are yet to be built have a lot of ‘sold’ signs up. It’s a great sign that the market is getting back on solid footing.”

Total inventory – models, finished vacant unoccupied new homes, and new homes under construction – was surveyed at 4,766 units. Finished vacant inventory now stands at 1,481 homes (2.3 months’ supply) which is the 23rd quarter in a row that this measure of inventory is lower than the previous quarter. “Inventory for immediate need home buyers is very low historically,” said Colvin, “which is driving prices up, and in turn helping to boost up existing home owner equity.”

The 24,436 vacant developed lots in the Triangle in 2Q13 represent a decrease of 3,352 lots from the 27,788 lots surveyed in 2Q12. At the current absorption rate, these lots represent a 35.4- months’ supply – the lowest since 3Q08. Metrostudy considers 18-24 months to be equilibrium, as on average, that is the amount of time it takes to entitle and deliver new home lots to the market. Not all lots share equal demand. In Triangle submarkets with the highest demand, lot supplies are well below equilibrium. Over the last 4 quarters 4,922 new lots were developed in the Triangle. While that is 27.5% more lots than were delivered through the end of 2Q12, it is only 60% of the absorption rate (annual starts), which indicates that overall lot supplies will continue to decrease and prices for existing lots will continue to increase in the near term.

“The home building market locally is making strides, with extraordinary gains in construction activity and home sales; inventory levels have remained low, while selling homes with fewer incentives. Construction lending businesses are doing well, and the prospects for traditional development financing for new projects are getting better each day. The market is expected to continue to grow, while expanding offerings to more buyers,” said Colvin.

For information contact:
Jay Colvin @ 919.461.9618
jcolvin@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.

The Triangle new home market continues gains in first quarter

Posted in Raleigh - Durham Market | Posted on 05-01-2013 | Written by Metrostudy News

(Raleigh, NC – May 1, 2013) The Triangle’s new home market is experiencing a lot of positive tail winds. 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.

For the first quarter ending March 2013, the Triangle started construction on 1,735 new homes an increase of 17.7% over last year at this time. Quarterly Closings totaled 1,585 or a 13.1% gain over the closings surveyed in 1Q12. “Builders are beginning to focus on raising prices and bottom line growth. The trend is a positive one, and is expected to continue throughout 2013,” sail Colvin.

Total inventory was surveyed at 4,494 units. This was an increase of 469 homes over the inventory surveyed in 1Q12, and 14% higher than the all-time low surveyed in 4Q11 of 3,952. At the current closing pace Total Inventory represents a 7.6-months’ supply of homes which is in-line with the Triangle’s historical average. “From 4Q99 through 4Q04 the Triangle had an average months’ supply of 7.6-months’, which shows how much progress has been made in the regions’ new home market,” said Colvin.

New home construction is increasing demand for new lots, spurring new development and great prices for land and developed lots. Over the last 4 quarters 4,477 new lots were developed in the Triangle, 8.4% more lots than were delivered through the end of 1Q12. “Builders developing lots for their own use is the primary source of the new lots, but traditional development sources are slowly becoming more active. This trend is expected to continue as new lot deliveries are well below the rate that current new home demand is signaling,” said Colvin.

“Home inventories are at historically healthy levels showing that the construction gains in 2012 were meeting real demand. More qualified buyers are entering the market, and the gains in the industry are gradually filtering into the broader economy. Lot shortages, and low inventory points towards price appreciation. We expect these trends to continue in 2013,” said Colvin.

For information contact:
Jay Colvin @ 919.461.9618
email:  jcolvin@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.

02/20/2013: Metrostudy – Fonville, Morisey & Barefoot President’s Breakfast

Posted in Events, Raleigh - Durham Market, The Triad Market | Posted on 02-19-2013 | Written by J.W. Colvin IV

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Fonville, Morisey & Barefoot President’s Breakfast

Wednesday, February 20, 2013

WHERE MacGregor Downs Country Club 430 St Andrews Ln Cary, NC 27511

AGENDA 8:30 a.m. – 11:00 a.m.

SPEAKER Jay Colvin - Metrostudy’s Regional Director of Raleigh and Triad Markets

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Knock on Wood Floors…a whole new breed of “First Time” homebuyers…

Posted in National Housing Market, Raleigh - Durham Market | Posted on 02-07-2013 | Written by J.W. Colvin IV

Even with the very high amount of multi-family construction occurring in many markets around the country, apartment occupancy rates remain high. In North Carolina’s Research Triangle apartment occupancy is at 95%. These high occupancy levels contribute heavily to every increasing rates – locally around $1,200/month for class A – which is making home ownership a very real alternative for those that qualify for a mortgage. Apartments are the historical incubator for new home buyers, and as the new home market normalizes, new home buyer seeds are starting to sprout. What is different during this cycle?  First time buyers expect more than ever from their home.

First of all, these aren’t your granddad’s apartments. Luxury finishes, larger open floor plans, technology integration and highly accommodative amenities are the norm now in class A & B apartments. The escalation of living taste isn’t confined to the single professional realm of high end apartments.  College dorm living is getting an upgrade as well. Dormitories and “for student” housing has taken a large leap forward in comfort and style as well. Granite counter tops, wood floors and built-ins are becoming more prevalent in the graduate and post graduate world. In the midst of these material realities, the first wave of young people who moved back in with their parents until they found jobs or have their finances in hand have begun to return to the housing market.

These buyers are accustomed to a certain level of “home finish” and amenity. In order for the new home builder community to capture that demand, industry members have to develop, finance, market and sell product that matches those desires. Historically low mortgage rates are helping buyers to cross large price ranges to find their choice in home. This is great for giving buyers more choices in homes to consider, the downside is choice overload or too many options to choose from, causing the buyer to be overwhelmed. At the same time builders can focus too much on a certain product that fits into a historical pattern for price and size, while neglecting emerging trends and what buyers really want in their new home.

The market has been recovering based on need based buyers. Family size and new household creation has driven production to the middle price points on the market. Since the first time buyer market has yet to fully reassert itself, this is the area where most builders will begin to focus.  In order for the recovery to hold gains and pick up momentum, the traditional first time buyer has to return to the market. As an industry, we need to prepare to capture the next wave of demand by having product, price and promotion in line with what these new home buyers will find the most appealing.