Over-reactions

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

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

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

San Francisco Housing Market Metrostudy 1Q14 Survey Results: Housing Market 1Q14: A Dramatic Shift to Higher Priced Starts

Posted in San Francisco Market | Posted on 05-19-2014 | Written by Metrostudy News

May 19, 2014: Metrostudy’s 1Q14 survey of the San Francisco Bay Area housing market shows that while annual new home starts are higher than 1Q13, quarterly starts have fallen significantly from that period. 1Q14’s annual new home starts are up 25% from 1Q13, while quarterly new home starts are down 38%. Annual closing levels are down 4%, and quarterly closings are down 29%. Annual starts have been outpacing closings since 3Q12.

As a result, total inventory levels that were once below equilibrium are now at the highest level since 2009. By the end of 2013, the annual start pace had significantly outpaced the annual closing pace and Metrostudy raised the caution flag as this can indicate weakening demand.

Our average “offer to build” base price for new Single Family detached homes is UP 9% over a year ago to $807K as builders see moderate demand and higher inventory levels. The average price for Attached homes is $740k; an increase of 5%.

“Start activity has shifted dramatically to the price ranges above $700K as builders adjust pricing to offset increased construction and land costs,” said Greg Gross, Regional Director of Metrostudy’s Northern California market. “This quarter we are seeing starts fall substantially in the range below $500K. Affordability remains a concern as home prices rise and supply is low. 19% of new home starts are priced above $1 million. At this point the Sacramento market becomes more attractive where 52% of the starts are under $400K vs. 4% in the Bay Area.”

Finished inventory of housing has been steadily decreasing over the past three years now. With 1,689 Finished Vacant homes, the market now has only 3.6 months of supply. Single Family Detached product stands at a 1.6-month supply. The inventory level of Attached product is 1,223 finished and vacant units, a 7-month supply and another 3,597 units under construction.

“Lot delivery in the Bay Area has slowed dramatically over the past few years, which has kept inventory levels far below equilibrium,” said Gross. “Lot inventory has declined 10% over the past year and now stands at 6,069 and Months of Supply is very low at 19 months. Lot supply continues to be rapidly absorbed; only 381 new lots were developed during 1Q14. Considering the barriers to development, the market continues to be facing a lot shortage.”

Metrostudy does not expect the housing market to fall dramatically, but experience more of a “cooling off” period during 2014 as the economy continues to heal and the market adjusts to the rapid increase in home prices. The Sacramento and Stockton regions will likely benefit from the expanding Bay Area economy, as homebuyers seek more affordable homes outside of the Bay area.

For information contact: greg gross @ 916.231.9370
Email ggross@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide. Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. www.metrostudy.com

About Hanley Wood

Hanley Wood 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.

2013 San Francisco Bay Area Market; Demand outpaced Supply

Posted in San Francisco Market | Posted on 02-17-2014 | Written by Metrostudy News

(San Francisco, CA – February 17, 2014) The San Francisco Bay Area market expects housing starts to remain steady spurring local economic expansion throughout the year, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

Bay Area annual housing starts are up 78% from 4Q12, while closings are up 21%. Quarterly new home closings are down 6% from 4Q12. The annual start pace is at the highest level since 1Q08 and the annual closing rate is nearly as high as 4Q10. By the end of 2013, the annual start pace had significantly outpaced the annual closing pace raising the caution flag as this may indicate weakening demand.

Finished inventory of housing has been steadily decreasing over the past three years now. With 1,550 finished vacant homes, the market now has 3.0 months of supply. Single family detached product comprises of 437 finished vacant; a 1.4-month supply. The inventory level of attached product is 1,113 finished and vacant units, a 5.4-month supply and another 3,987 units under construction. “Considering the size of the Bay Area housing market, we still remain considerably under supplied,” said Greg Gross, Regional Director of Metrostudy’s Northern California market.

Lot deliveries in the Bay Area have slowed dramatically over the past few years, which has kept inventory levels far below equilibrium. Lot inventory has declined 15% over the past year and now stands at 6,069 (Figure 7) and months of supply declined to only 17. Lot supply continues to be rapidly absorbed even though more than 3,100 new lots were developed during 2013. “Metrostudy is tracking about 107,000 Bay Area future lots with fewer than 7,900 lots being developed now; a very small number considering the size and potential demand of the Bay Area. Considering the barriers to development, the market continues to be facing a lot shortage,” said Gross.

“Metrostudy expects demand to remain steady in 2014. However, there are some indicators that may point to slightly fewer new home starts compared to 2013. Primarily those being: tightening lending standards, lower FHA limits, lack of lot supply, rising home prices and interest rates all of which may cause new home buyers to rethink their home-buying decisions during 2014,” said Gross.

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.

02/05/13: Metrostudy San Francisco Bay Area 4Q12 Executive Client Briefing

Posted in Events, San Francisco Market | Posted on 01-14-2013 | Written by Greg Gross

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

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

WHEN: Tuesday, February 5th, 2013 from 9:00 a.m. – 11:00 a.m.

WHERE: Courtyard Marriott – San Ramon, CA

INFO: e-mail Greg Gross ggross@metrostudy.com

11/08/12: Metrostudy 3Q 2012 San Francisco Bay Area Executive Market Briefing

Posted in Events, San Francisco Market | Posted on 10-11-2012 | Written by Greg Gross

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

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

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

WHEN: Thursday, November 8th 2012 from 9:00 – 11:00 am

WHERE: Courtyard Marriott – San Ramon, CA

INFO: e-mail Greg Gross at ggross@metrostudy.com

The Bay Area Market is beginning to show signs of stabilization in 1Q11

Posted in San Francisco Market | Posted on 05-18-2011 | Written by Metrostudy News

(San Francisco, CA– May 1, 2011) “The Bay Area Market is performing much better than many others and is beginning to show signs of stabilization in 1Q11,” according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

The overall Bay Area economy is showing a sign of growth this quarter. Annual job creation is positive in 1Q11. The unemployed population is 10.3% compared to the State level of 12.0%. However, the anticipated state budget crisis will have a significant impact on jobs throughout 2011.

Bay Area Annual Housing starts are down 27% from 1Q10, while closings are also down 40%. There were only 515 new home starts and 733 closings in 1Q2011. Closings have been outpacing starts for more than three years. As a result, inventory levels are below equilibrium.

Finished inventory of housing has been steadily decreasing over the past year. As of 1Q11, vacant inventory levels are now below equilibrium. The Bay Area housing market has 2,650 Finished Vacant homes, meaning 6.9 months of supply; but consider the Single Family Finished Vacant inventory levels are considerably low at 411, or 1.9 months of supply.

Lot inventories in the Bay Area have also slowed over the past few years. This slow down of development will make finished lots more desirable and thus increase demand, causing prices to go down. As of 1Q11, lot Inventory for single family detached homes is 8,525, a 47-month supply. These lots will go quickly as the market continues to improve.

“It appears the market has bottomed out and will continue to evolve through 2011 and show signs of improvement by end of the year,” said Greg Gross, director of Metrostudy’s Northern California Region. “2011 will be a year of opportunity to secure long term land positions throughout the California market. A thorough understanding of competitive framework, buyer segmentation and conducting strategic planning will be vital for success and in some cases, survival.”

For information contact:
greg gross @ 925.826.3801
email ggross@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

Bay Area housing market beginning to show signs of stabilization in 4Q10

Posted in San Francisco Market | Posted on 02-08-2011 | Written by Metrostudy News

(San Francisco, CA– February 1, 2011) The Bay Area housing market is performing much better than many others, and is beginning to show signs of stabilization, shows a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

“The overall Bay Area economy is showing a sign of stabilization, as the rate of loss is slowing,” said Greg Gross, director of Metrostudy’s Northern California Region. January though November showed employment gains with an increase of 27,000 more people employed. The region’s job market is stronger than most throughout the state but the losses are significant. While the annual figures are negative, the overall Bay Area job market is gaining traction in some areas

Bay Area Annual Housing starts are down 15% from 4Q09, while closings are also down 27%. Closings have been outpacing starts for more than three years. As a result, inventory levels are now below equilibrium.

Finished inventory of housing has been steadily decreasing over the past year. With 3,234 Finished Vacant homes, the market now has 6.2 months of supply.

Total housing inventory for attached product has increased to 19 months. Only one year ago there was two years of supply.

As the past few years have demonstrated, the San Francisco Bay Area Region is not immune to the slowing national economic trends. However, it is expected that the Bay Area housing market will continue improving through 2011 as the job situation gradually improves and housing inventory shrinks.

While challenging for current business, like 2010, 2011 will also be a year of opportunity to secure long term land positions throughout the California market. A thorough understanding of competitive framework, buyer segmentation and conducting crucial strategic planning will be vital for success and in some cases, survival.

For information contact:
greg gross @ 916.231.9370
email ggross@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

Bay Area housing market to challenge builders, show gradual improvement signs by 4Q2010

Posted in San Francisco Market | Posted on 11-09-2010 | Written by Metrostudy News

(San Francisco, CA– November 1, 2010) The San Francisco housing market is expected to challenge builders, yet show gradual signs of improvement by 4Q10, 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.

3,224 Finished Vacant homes translate to 4.9 months of supply. Single Family Detached product inventory had only 407 finished vacant and 1.5 month supply. “Total housing inventory for attached product has dropped to 14 months,” said Greg Gross, director of Metrostudy’s Northern California Region. “Only one year ago we had two years of supply.”

The Oakland MSA lost 23,700 jobs year over year and San Francisco lost 18,300 jobs year over year. “The rate of loss is slowing and the region’s job market is stronger than others in the state, but the job losses are significant,” said Gross. “The anticipated state budget crisis and struggling local governments will have a significant impact on jobs throughout 2010 and very likely into 2011.”

The 3,764 Bay Area Annual Housing starts are up 7% from 3Q09, while the 7,871 closings are down by 2%. Closings have outpaced starts for three years now. “This is good news for inventory,” said Gross. “As a result, inventory levels are now below equilibrium.”

“2010 will likely be challenging as the market struggles with the idea of ‘bottoming out’,” said Gross. “However, a thorough understanding of competitive framework, buyer segmentation, and conducting crucial strategic planning will make 2010 a year of opportunity to secure long term land positions in the California market.”

For information contact:
greg gross @ 925.826.3801
email ggross@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

Demand for Single-Family New Homes May Outpace Supply

Posted in San Francisco Market | Posted on 02-03-2010 | Written by Metrostudy News

(San Francisco, CA – Jan. 26, 2010) The supply of finished new single-family detached homes in the Bay Area market continues to dwindle. Overall new-home inventory totaled 4,355 units for the nine-county region at the end of the fourth quarter of 2009, a 6.2-month supply. However, of this total, only 531 were single-family detached homes, a 1.9-month supply, said Greg Gross, director of Metrostudy’s Bay Area division.

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