July 2014: Metrostudy’s 2Q14 survey of the South Florida housing market showed growth constrained by land availability, labor supply, and the cumulative impact of price increases. While 2Q14 starts increased 22% to 1,996 over 1Q14’s levels, the annual pace dipped slightly to 6,848 as compared to the last quarter. The annual rate is 5% higher than the annual pace recorded in the second quarter of 2013. For the past four quarters, annual starts activity has stabilized at approximately 6,850.
The annual closings rate of 6,274 was up slightly from the previous quarter and is up 20% from one year ago, which extends this upward trend to nine consecutive quarters. Finished, vacant inventory increased 6% to 1,201 units from last quarter, and this figure is 23% higher than the second quarter of 2013.
Finished, vacant inventory has hovered in the 2 months-of-supply (MOS) range for the past seven quarters, and stands at 2.3 MOS for the current quarter. The low rate of new home inventory is a sign that builders are able to sell almost every home they start. Also, labor and land constraints are keeping the supply of new homes from getting out of balance with demand.
Vacant, developed lot (VDL) inventory dropped slightly to 21,930, a 38 month supply. This is down from 69 months-of-supply in the second quarter of 2012. “The supply of vacant developed lots varies across the six county region,” notes David Cobb, Director of Metrostudy’s South Florida region. “Lots are plentiful and relatively cheap (by South Florida standards) in St. Lucie and Indian River counties. Lot supply is not keeping up with demand in Palm Beach, Broward, and Dade counties.”
We are seeing a change in the price distribution of new homes started in the region, as starts for homes priced under $200k have precipitously declined As per the chart below, you can see that more homes are being started in the over $400k range: .
Annual Starts by Price Range:
“Sales prices jumped significantly in 2013 as the housing recovery gained traction in South Florida,” notes Cobb. “In 2014, prices continued to rise, albeit at a slower pace than the previous year, indicating the possibility that current sales prices may be reaching the tipping point with consumers.”
Below are the top 10 communities in South Florida, ranked by annual starts through the second quarter of 2014:
1 Aragon (Miami-Dade)
2 Aventura Isles (Miami-Dade)
3 Tradition (St. Lucie)
4 Miralago Parkland (Broward)
5 Silver Palms (Miami-Dade)
6 Kendall Square (Miami-Dade)
7 Canyon Trails (Palm Beach)
8 Valencia Cove (Palm Beach)
9 Bridges, The (Palm Beach)
10 Abacoa (Palm Beach)
“Aragon by Lennar claims the top starts spot for the quarter, followed by Aventura Isles, the former starts leader,” said Cobb. “St. Lucie’s Tradition continues to do well, and rises to third place. Lennar’s Miralago puts the Parkland submarket on the map, and it continues to lead with Silver Palms and Kendall Square. GL Homes adds three top sellers with Canyon Trails, Valencia Cove, and the Bridges, while Pulte/DiVosta’s Abacoa rounds out the top 10.”
Results by County:
Miami-Dade: Miami-Dade County loses its lead to Palm Beach County this quarter, with an annual starts pace of 2,242, down 8% from the previous quarter and off 7% year over year. However, quarterly starts rebounded 42% from the previous quarter. Closings are up 26% from a year ago. Finished, vacant inventory stands at 2.4 MOS.
Broward: Housing starts in Broward County rose 5% over the previous quarter. The annual starts pace remains flat at 1,089, due to land constraints in the county. Finished, vacant inventory drops further to 1.4 MOS.
Palm Beach: Housing starts in Palm Beach County are up 6% from the previous quarter and are up 12% year over year. Closings were off 8% from the previous quarter, but are up 7% annually. Finished, vacant inventory remains low at 1.4 months of supply.
Treasure Coast: The Treasure Coast includes Indian River, St. Lucie, and Martin counties. Starts are up 4% and closings increased by 10% over the previous quarter.
For information contact: David Cobb @ 813-443-6504
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
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