Posted in South Florida Market | Posted on 02-05-2014 | Written by Metrostudy News
(West Palm Beach, FL – February 5, 2014) Positive local job growth, price appreciation, and shrinking inventories helped South Florida builders achieve their best year since 2006. Although starts this quarter declined by 20%, start activity this year exceeded 2012 by 34%. Finished vacant new home inventory remains tight in Palm Beach and Broward counties, and the Treasure Coast posted significant increases in start activity from a year ago. Dade remains the sales leader in the market with over 2,500 starts in 2013. This is according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.
The pace of new home construction in South Florida slowed by 20% in 4Q13 with 1,437 housing starts, versus 1,799 in the prior quarter. This level of home building is 4.7% higher than in 4Q12, but 29% off the 2013 peak attained in the second quarter of this year.
“The decline in starts can be attributed to several factors, including the spike in interest rates, aggressive builder price increases in the first half of the year, and a dip in consumer confidence caused by the government shutdown in October,” said David Cobb Metrostudy’s Regional Director for the South Florida Market.
Highlights by County:
Miami-Dade: Miami-Dade County leads the six-county market with an annual starts pace of 2,545. Five of the top 10 communities are located in Miami-Dade. However, starts peaked in the second quarter at 895, and have declined by over 50% since, due in part to Aventura Isles’ high starts rate in the second quarter. Completions, on the other hand, are up 46% year-over-year.
Finished, vacant inventory has now crept to a 3.1 months-of-supply level, up from 2.2 a year ago. Miami-Dade’s buyers include an international component, and this is a factor in the timing of move-ins. Now edging above normal, Miami-Dade’s finished vacant inventory level bears watching.
Broward: Housing starts in Broward County fell 27% in the fourth quarter, to 211, from 291 during the third quarter. Starts are also down 27% from a year ago.
There are eight communities in Broward County reporting at least 50 starts in 2013, and six of them are in the Cooper City-Miramar-Davie submarket. A few of these have a supply of vacant developed lots remaining, but most are nearing build out. Northwest Broward County (aka “The Wedge”) will eventually replace south Broward as the most significant source of new home supply. Notable sales successes this year by Standard Pacific, Toll Bros., and Lennar are indicative of this emerging trend. Finished, vacant inventory remains quite tight at only 1.6 months-of-supply.
Palm Beach: Palm Beach County’s housing market is a model of stability, with little variation quarter-over-quarter in starts, completions, and homes under construction. Finished, vacant inventory remains in the healthy range, at only 1.6 months-of-supply, slightly above the second quarter bottom of 1.3.
Martin: This market is constrained not by land but by policy. Finished vacant months-of-supply has declined y-o-y from 3.7 months to 2.6 months today.
St. Lucie: St. Lucie has firmly rebounded from the bottom with quarterly starts up 114% from a year ago. The Tradition community leads the way, and the market should continue to improve, led by a solid recovery in job growth.
Indian River: Indian River’s market continues to improve with quarterly starts up 45% from a year ago. Finished, vacant inventory has dropped from the peak of 11 months-of-supply in 2010 to 2.9 as of the end of 2013.
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
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