Lots of Catch-Up

Posted in Atlanta Market, Austin Market, Central Florida Market, Dallas - Ft. Worth Market, Denver - Colorado Springs Market, Houston Market, Inland Empire Market, Jacksonville Market, Las Vegas Market, Maryland Market, Naples - Ft. Myers Market, National Housing Market, Northern Virginia Market, Phoenix - Tucson Market, Raleigh - Durham Market, Sarasota - Bradenton Market, South Florida Market, Southern California Market, St. George - Mesquite Market, Tampa Market | Posted on 08-04-2014 | Written by Brad Hunter

brad hWe have been talking for years about the lot shortages that builders are facing.  Now, it’s time to talk about how many lots are being developed.  Builders and developers are now playing “catch-up,” with builders buying land and lots and developers/investors paving roads and putting in infrastructure to serve the builders’ needs at a frenetic pace.

The pace of lot delivery (completion, ready for the builder) has gone up 140% in the past two years, much faster than the pace of housing production has risen (+84%).  Despite this increased pace, lot development STILL lags the pace of home production nationwide.

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In some markets, the lot production machine is in full gear, and has caught up with demand.  This is a good sign for builders, and a vital turning point for home production in 2015 and beyond.

The TOP TEN states for lot production in 2Q14 are:

State       2nd Q.   Starts        2nd Q. Lot       Deliveries
Texas 19,714 18,931
Florida 12,416 10,974
California 10,050 10,219
North Carolina 4,866 3,168
Georgia 4,489 1,270
Colorado 3,985 3,276
Arizona 3,519 4,596
Maryland 2,436 2,122
Utah 2,328 2,498
Virginia 2,198 1,850

Note that lot production has caught up with new home production in California, Arizona, and Utah.   Florida development is woefully far behind demand for lots, hence the skyrocketing cost of finished lots there.

Metrostudy defines “future lots” as those that are in the pipeline (some are pre-entitlement), and Florida has the deepest pipeline.   Below are the top 10 states ranked by known future lots.

State Future Inventory
Florida 1,597,055
California 1,378,299
Arizona 1,213,476
Texas 651,413
Colorado 406,613
Georgia 316,956
Illinois 281,054
Nevada 227,121
Maryland 194,829
Virginia 183,613

 

South Florida Housing Market Metrostudy 2Q14 Survey Results: Despite Regional Constraints, Steady Demand Creates Pricing Pressure

Posted in South Florida Market | Posted on 07-30-2014 | Written by Metrostudy News

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:

Rank Community

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
Email dcobb@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.

Is there opportunity for lot development in South Florida? Why or why not…and where?

Posted in National Housing Market, South Florida Market | Posted on 06-30-2014 | Written by David Cobb

With South Florida’s housing recovery well under way, it is no surprise that backhoes and bulldozers are once again in action all across South Florida.  So, let’s take a county-by-county look at lot inventory and see where we stand.

Metrostudy’s South Florida region is comprised of eight counties.  Six are on the east coast – Indian River, St. Lucie, Martin, Palm Beach, Broward, and Dade, and two are on the west coast – Lee and Collier.

We will start with Indian River County.  We see that the annual start rate has improved from 160 new home starts in the first quarter of 2010 to 426 in the first quarter of 2014, a 166% increase.  Vacant developed lot inventory (“VDL”) stands at 4,147, reflecting a 117 month supply at current absorption levels.  Moreover, there are an additional 3,703 lots actively under development, so we can make a general assumption that, for the time being, Indian River County has more than enough lots in the pipeline to satisfy current demand.

Next up is St. Lucie County, with the largest future lot inventory in South Florida at 70,558 units.  St. Lucie’s annual start rate has improved from 67 starts in 2010 to 394 in 2014, a 488% increase.  Vacant developed lot inventory is 6,712, representing a staggering 204 month (17 year) supply of ready-to-build-on lots.  Even so, there are an additional 3,133 lots in the development stage, which implies that many of the VDL lots are in “B” and “C” locations.  Otherwise, why develop more lots? Read the rest of this entry »

Harry Potter Casts a Spell on Florida’s Economy

Posted in Central Florida Market, In The News, Jacksonville Market, Naples - Ft. Myers Market, Sarasota - Bradenton Market, South Florida Market, Tampa Market | Posted on 06-20-2014 | Written by Metrostudy News

anthony cJune 5 (Bloomberg) –Florida’s employment picture has improved faster than any other state since the financial crisis — and some Floridians says that’s because Harry Potter has been working his wizardry in their state.

Bloomberg’s Yang Yang reports from Orlando.

See full interview here

Metrostudy Regional Director – Anthony Crocco

Metrostudy South Florida Market Analyses at the 2014 Housing Leadership Summit

Posted in National Housing Market, South Florida Market | Posted on 06-04-2014 | Written by Metrostudy News

David CobbBuilders in Broward County are getting creative by converting old golf courses into lots to meet constrained supply, explains Metrostudy’s David Cobb in his market overview at the 2014 Housing Leadership Summit. The five diverse submarkets and eight counties that make up South Florida are seeing concentrated housing starts, affordable home building on the Treasure Coast, and steady growth in the region.

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

Building the Case for Active Adult on the Treasure Coast

Posted in Central Florida Market, Naples - Ft. Myers Market, National Housing Market, South Florida Market | Posted on 05-08-2014 | Written by David Cobb

There’s always a discussion when an active adult oriented community is planned as to whether it should be age restricted (55+ only) or age targeted. One argument holds that an age restricted community is still preferred by older buyers, who simply don’t want children permanently in their neighborhood. This will attract enough buyers to meet the absorptions expected by the builder, so the argument goes. The other argument is that with careful planning of the community and the right product, you’ll get buyers of all ages, including the active adult purchaser. Both are probably winning strategies as there are many success stories of each type, but there’s no question that the age-restricted active adult community is still popular. Read the rest of this entry »

South Florida Housing Market Metrostudy 1Q14 Survey Results: Despite Positive Job Numbers, Housing Starts have Plateaued: Land Availability, Labor Supply and Price Increases Threaten Future Growth

Posted in South Florida Market | Posted on 05-06-2014 | Written by Metrostudy News

May 6, 2014: March 2014 was Florida’s 44th consecutive month with positive job growth, and at 6.3%, the state’s unemployment rate remains below the national average of 6.7%. The pace of new home construction in South Florida improved by 16.6% in the first quarter of 2014 with 1,659 housing starts, versus 1,423 in the prior quarter. This level of home building is only 1.3% higher than in the first quarter of 2013, and is 18% off the 2013 peak attained in the second quarter of that year.

On an annual basis, starts remained flat at 6,903 when compared to the previous quarter, but the annual rate is up 19% from the first quarter of 2013. The annual start rate has plateaued at 6,800- 6,900 for the past three quarters. The plateau in starts can be attributed to several factors, including constraints in land availability, labor supply, and the cumulative effect of price increases. How this will play out in 2014 remains to be seen, but it is likely to put upward pressure on prices for the rest of the year.

Highlights by County

Miami-Dade: Miami-Dade once again leads the six county market in annual starts, although the number, 517, is down 12% from 1Q13. Still, that represents a 22% increase from 4Q13, and four of the top ten communities are located in Miami-Dade. Completions declined 34.6% from the previous quarter, when builders pushed to finish homes by the end of the year. Vacant inventory dropped to 1.8 months of supply, down from 3.1 months in 4Q13.

Broward: 1Q14 Housing starts in Broward County jumped 65% from 4Q13, driven by construction activity in Parkland. Finished, vacant inventory remains very tight at only 1.6 months of supply – making eight consecutive quarters in which this rate remains below 2 months.

Palm Beach: Housing starts in Palm Beach County surged 11.2% from the previous quarter and are up 15.1% YoY. Completions increased by 19% to 560, and the 1,170 homes under construction represent the highest level of activity in over six years. Finished, vacant inventory remains low at 1.3 months of supply, and as with Broward, has been below two months of supply since mid-2012.

Martin: This land-constrained county saw starts drop by 38.7% QoQ, while completions increased by 44%. Finished, vacant months-of-supply increased from 2.6 to 3.7 months.

St. Lucie: St. Lucie’s starts and completion rates have improved substantially from one year ago. The Tradition community continues to lead the county in housing activity.

Indian River: Starts are up 30.3% QoQ, and finished vacant inventory increased slightly to 3.3 months of supply.

For information contact: david cobb @ 239.220.7023
email dcobb@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.

South Florida Housing Market Posts Solid Year in 2013

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.

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.

Third Quarter Housing Pullback Not a Cause for Concern

Posted in South Florida Market | Posted on 10-26-2013 | Written by Metrostudy News

The pace of new home construction in South Florida slowed in the third quarter, with 1,813 housing starts, compared with 2,040 (the post-bubble peak) in the prior quarter. Although still considerably higher than a year ago, this level of home-building is 11.1% lower than that of the second quarter.

“This decline is not a cause for concern, and is not an inflection point. In fact, substantially all of the apparent decline is actually due to the prior quarter’s surge, driven by the 249 starts in the Aventura Isles development in the northern portion of Miami-Dade County,” said Brad Hunter Metrostudy’s Chief Economist.

Highlights by County:

Miami-Dade: The basic upward trajectory of homebuilding in Miami-Dade County is in place, but the path has been jagged when viewed quarter by quarter. There was a massive surge of construction in the second quarter of 2013, followed by a drop in the third quarter. “The third quarter number was still higher than the first quarter number; the intervening quarter was the anomaly,” Hunter said

Finished, vacant inventory has not yet reacted to the surge in construction, but there may well be a large uptick in this number in the fourth quarter and first quarter 2014 readings, depending upon how quickly the buyers of those homes get moved in. “The homes are sold, so they will be moved into in short order, meaning that a related increase in finished vacant inventory will be temporary,” Hunter said.

Annual move-ins in Miami-Dade rose 61% year over- year, and the second quarter’s 422 move-ins were up 7.7% versus the first quarter’s pace.

Broward: Housing starts in Broward County fell 12.4% in the third quarter to 298, from 340 in the second quarter. Still, the latest reading is up 21.1% from a year earlier.

There has been a marked shift within the county in the last six months, from the south to the north. This has happened as Monterra has built out in the south, and the large north-county communities in Parkland have started to ramp up. “The northwestern portion of Broward County is on its way to replacing southwest Broward as the greatest source of new home supply. Lennar and Standard Pacific, along with Toll Brothers and WCI, will lead this surge,” Hunter said.

The result of this shift is that Broward’s numbers at a high level look like they are flat or down. Additional new projects are being planned in the central portion of the county, but most of the rest is infill.

Palm Beach: Housing starts in Palm Beach County are generally staying close to 500 per quarter, having ticked up to 530 in the third quarter. The inventory of finished, vacant new homes rose to 229 in the third quarter, up 16.2% from the previous quarter and almost back up to year ago levels. The months-of-supply of finished housing is at 1.5 months, down from 1.8 months a year ago.  “Palm Beach County is a very tight market,” Hunter said.

Martin: Martin County is finally back to a normal level of housing supply, having shed most of the overhang from the boom and bust. Starts got back into the triple digits again, for the first time since the financial industry meltdown. There were 113 starts in the third quarter, up from 99 in the prior quarter, and up from 93 a year ago. Finished, vacant inventory stands at 64 units, or 2.8 months-of-supply.

St. Lucie: Construction activity has surged in the past six months in St. Lucie County. The quarterly pace of housing starts increased 44.1% sequentially, and is now 181.4% above the year-ago pace. The absolute numbers are small, of course, allowing for massive percentage changes. The actual number of homes started in the third quarter is 121, compared with only 43 a year ago. At least the trend is clearly upward. Finished, vacant inventory is still high in most areas of the county, at 8.6 months on average.

Indian River: Activity is fairly flat in Indian River County, in terms of starts, but the pace of move-ins is now extremely strong. Move-ins (what Hunter calls “observed closings”) rose 61.1% in the third quarter, from 66 in 2Q to 116 in 3Q. As a result, the months of supply of finished, vacant inventory fell from 4.5 months to only 2.8 months.

For information contact:
brad hunter @ 561.573.8351
email bhunter@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.