Housing starts up strong, with some stand-out markets

Posted in Atlanta Condo Market, Charlotte Market, Inland Empire Market, Naples - Ft. Myers Market, Nashville Market, National Housing Market, Reno Market, Rio Grande Valley Market, Sarasota - Bradenton Market, Southern California Market, St. George - Mesquite Market | Posted on 08-19-2014 | Written by Brad Hunter

See Top 10 Markets for New Residential  Construction Here 

brad hHousing starts numbers out today surprised many observers with its strength (+15.7%), but we find it to have been in line with our actual counts, released earlier this month. As we predicted, last month’s Census estimate was revised upward, and now the numbers are back in line with the trends revealed by the Metrostudy roll-ups.

The last release of housing starts data from the Census Bureau caused undue alarm about a collapse of activity in the South.  The Census release had shown a 29.6% decline for total starts in the South, but as we pointed out at the time, this exaggerated the weakness in the south. As a matter of fact Metrostudy’s research shows that several markets in the south are up, both based on prior quarter results, and year ago. Raleigh was down 5% versus a year ago, but Charlotte, Atlanta, Texas, and South Florida showed increases.

Metrostudy’s data show that some of the most “beaten-down” markets are now doing better.  In Las Vegas, for example, housing starts were up 16% from 1st quarter 2014 to 2nd quarter 2014, and Phoenix showed a 12.3% increase quarter-on-quarter (though it is still down sharply year-on-year). Housing starts in Chicago were up 87% quarter-on-quarter, and up 30% year-on-year.  Naples Florida showed double-digit gains, both quarterly and annually.

Some significant trends were evident in Metrostudy’s data in California. Housing starts in the Riverside area rose 48.5% quarter on quarter, and are up 14% year-on-year.

We are seeing an increase in lot development in Riverside as lot shortages around the I-15 Corridor have intensified. The Inland Empire is developing its own economy, with 3% job growth, meaning that is it is no longer just a bedroom community for L.A.

Housing starts in Northern California rose 92% in the second quarter compared with the previous quarter, and are up 19% year-on-year. Starts there are at a record high since the boom. Contra Costa and Alameda County had particularly strong increases.

Also see, Brad Hunter discuss the promising increases in the Residential Remodeling Index and New Residential Construction this month on Bloomberg TV.

 

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

 

Inland Empire positioned for explosive growth

Posted in Inland Empire Market, San Diego Market, Southern California Market | Posted on 07-25-2014 | Written by Steve Johnson

steve j Local and regional prognosticators are proclaiming the Inland Empire region (Riverside and San Bernardino counties) as positioned well to shortly regain it’s historical position as the leader of California’s new home production.  While often referred to as a bedroom community located east of Los Angeles and Orange counties, the Inland Empire is home to 4.2 million residents and the peak of the last cycle the region delivered a staggering 30,000 new homes per year. Land developers could not produce enough lot inventory fast enough.  It was a daily struggle to maintain a minimum supply to feed the housing demand. Read the rest of this entry »

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.

Neighborhoods, not Subdivisions, are the new trend in Southern California

Posted in Inland Empire Market, Southern California Market | Posted on 05-07-2014 | Written by Steve Johnson

This is not your typical recovery from a recession in Southern California. What seems to be missing is the sizzle produced by the Baby Boomers in the 1980’s or 90’s acting in mass seeking shelter. These boomers who changed every tenet of society as they moved through life’s cycles disregarded double digit interest rates or overnight price increases and committed to buy a new home without impunity. Vast acreage was dedicated to salmon colored roofs and cookie cutter subdivisions, the joke was often told of the couple on a date night that had a few to many and wound up in the wrong house. Read the rest of this entry »

Coastal New Home Recovery, steady as she goes

Posted in Southern California Market | Posted on 02-13-2014 | Written by Metrostudy News

(Riverside, CA – February 13, 2014) More inventory and slowing price appreciation will take place in 2014. The residential housing markets will be driven by organic localized employment growth in the next year which continues to plod along. 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 L.A. Coastal market (O.C./L.A./Ventura Counties) continues with a slow but steady recovery in the fourth quarter 2013 Total closings for 4Q13 were up 25 % from 3Q13 with 1,756 homes closed, and up 6 % compared to 4Q12. Starts for 4Q13 were 1,723 up 3 % from 3Q13 and up a solid 21 % from the fourth quarter of 2012. “The tech coast recovery remains solid,” said Steve Johnson, Regional Director of Metrostudy’s Southern California Market.

Single-family inventory, which is comprised of units under construction, finished vacant units and model homes totaled 5,948 representing 11.3 months of supply (not defined as sold or unsold). The majority of inventory in the region are built to contract (presold). Finished vacant inventory has decreased 8 % throughout the Coastal Southern California market, in 4Q13. This represents 30% of the total inventory. Historically finished vacant inventory comprised 18 % of the total inventory. In Los Angeles finished vacant represented 41 % of the total inventory, predominately attached product with 1,220 units. Orange County finished vacant represented 15% in 4Q13, Ventura County finished vacant decreased to 17 % of total inventory.

VDL inventory has increased in the L.A. Coastal market with 6,504 Detached Vacant Developed Lots (improved lots) representing a 19.7 months of supply. Attached Vacant Developed Lots are 2,626 representing a 14.7 months of supply. “Remaining Finished lot inventory is not proximate to employment centers,” said Johnson.

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.

Southern California continues with a slow but steady recovery in the third quarter

Posted in Southern California Market | Posted on 10-29-2013 | Written by Metrostudy News

(Riverside, CA –October 29, 2013) The L.A. Coastal market (O.C./L.A./Ventura Counties) continued the forward momentum in the third quarter, 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.

Starts and closings for the L.A. Coastal market were softer with total closings for 3Q13  down 7 % from 2Q13 with 1,423 homes closed, and down 3 % compared to 3Q12. Starts for 3Q13 were 1,734 up 6 % from 2Q13 and up an incredible 37 % from 3Q12.

Single-family inventory, which is comprised of units under construction, finished vacant units and model homes totaled 6,054 representing 11.6 months of supply (not defined as sold or unsold). “Low inventory in the resale market is pushing buyers to the new home market,” said Steve Johnson, director of Metrostudy’s Southern California Region.  Finished vacant inventory has decreased 8 % throughout the Coastal Southern California market in 3Q13. This represents 27% of the total inventory. Historically finished vacant inventory comprised 18 % of the total inventory. VDL inventory has increased in the L.A. Coastal market with 6,504 detached vacant developed lots (improved lots) representing a 19.7 months of supply. Attached vacant developed lots are 2,626 representing a 14.7 months of supply.

“The Tech Recovery stretching along the California coast from San Francisco to San Diego is providing entrepreneurial growth which is hitting the office market like a big wave. The impact of these start-ups on creative office inventory has driven prices up and inventory down, energizing markets and is now pushing into L.A. and North Orange County. Great success at residential projects in many urban areas have been reported as young techies flock to the coast,” said Johnson.

For information contact:
steve johnson @ 951.848.3100
email sjohnson@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 Inland Empire housing starts slowed by limited lot supply

Posted in Inland Empire Market | Posted on 10-29-2013 | Written by Metrostudy News

(Riverside, CA – October 29, 2013) Inland markets starts were up 38% from 1 year ago on an annualized basis to 5,289 and are promising to continue to march forward over the next few years. The problem is the lack of finished lots available for new homes to be built on in the locations proximate to employment centers, 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 Inland Empire new housing market continues to recover from the great recession,” said Steve Johnson, Regional Director of Metrostudy’s Inland Empire market. Total closings for 3Q13 were up 8 % from 2Q13 with 1,204 homes closed and up 4 % over third quarter 2012. Starts for 3Q13 were 1,304 down 2 % from second quarter and down 4 % compared to 3Q12, which had 1,368 starts.

Single family inventory which is comprised of units under construction, finished vacant units and model homes totaled 3,509 units (Not defined as sold or unsold) at the end of 3Q13 increasing by less than 2 % over second quarter to an 8.2 month supply. Finished vacant inventory in the Inland Empire has decreased 4 % compared to 2Q13 and included 977 homes in the 3Q13 only a 2.3 months of supply; representing 27 % of the total inventory (UC/FV). Historically in a balanced market finished Vacant represented 18 % to 20 % of total inventory.  VDL inventory decreased less than 2 % since 2Q13 and there are now 15,564 vacant developed lots in the Inland Empire representing a 35.3 months of supply.

“2014 promises to be a very competitive year with home buyers visiting the many new projects to choose from and Home Builders fighting cost increases, tough lenders and increasing interest rates,” said Johnson.

For information contact:
steve johnson @ 951.848.3100
email sjohnson@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.

Southern California maintains strength in the second quarter

Posted in Southern California Market | Posted on 08-08-2013 | Written by Metrostudy News

(Riverside, CA – August 8, 2012) The L.A. Coastal market (O.C./L.A./Ventura Counties) continued the forward momentum in the second quarter, 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 EDD numbers reflect a gain of 96,700 jobs in June 2013 year over year. In the L.A. Coastal regional market, Los Angeles County posted annual job gains of 39,800 net new jobs year over year. Orange County posted a positive +25,700 net new jobs year over year. Ventura County had a net increase of 4,200 jobs year over year. With the unemployment rate at 9.1 %, the six county Southern California regional unemployment rate is stronger than that of the state unadjusted unemployment rate of 8.8 % and weaker than the national unemployment rate of 7.8 %. The L.A. Coastal Regional unemployment breaks out to be 10.2 % in Los Angeles County, 7.4 % in Ventura County and 6.1 % in Orange County.

Total closings for 2Q13 were down 7 % from the first quarter with 1,527 homes closed, and up 20 % compared to 2Q12 starts for the second quarter 2013 were 1,672 up 27 % from first quarter 2013 and up an incredible 36 % from the second quarter of 2012. The annual starts rate was 5,671 units an increase of 53 % compared to the 12 months ending in June 2012; Annual closings totaled 6,296 units, an increase of 36 % when compared to the 12 months ending in June 2012. “The Coastal markets have been dramatically undersupplied thru the recession resulting in tremendous pent up demand,” said Steve Johnson, director of Metrostudy’s Southern California Region.

Single-family inventory, which is comprised of units under construction, finished vacant units and model homes totaled 5,571 representing 10.6 Months of Supply (not defined as sold or unsold). The majority of inventory in the region is built to contract (presold). Finished vacant inventory has decreased 1 % throughout the Coastal Southern California market in 2Q13. This represents 32% of the total inventory. Historically finished vacant inventory comprised 18 % of the total inventory. In Los Angeles, finished vacant decreased 4% to 41 % finished vacant in2Q13 and in Orange County finished vacant has decreased to 16 % in 2Q13, In Ventura County finished vacant increased to 20 % of total inventory. . “Inventory is very low as Home Builders scramble to get new projects underway,” said Johnson.

“Major hurdles remain for a full recovery, such as limited access to capital, increasing cost and lack of skilled labor,” said Jonson.

For information contact:
steve johnson @ 951.848.3100
email sjohnson@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 Inland Empire housing market continues to grow in the second quarter of 2013

Posted in Inland Empire Market | Posted on 08-08-2013 | Written by Metrostudy News

(Riverside, CA – August 8, 2013) The Inland Empire can once again be the number one producer of housing in the country or it can reconsider volume and start addressing quality, 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 Inland Empire (Western Riverside County and San Bernardino County) regional economy continues to produce positive job growth at 7,700 jobs gained year over year thru June 2013. “This trend of positive job growth is weaker than the first six months of the year but is likely to be revised upward slightly next month,” said Steve Johnson, Regional Director of Metrostudy’s Inland Empire market.  With an unadjusted unemployment rate at 10.2% the Inland Empire remains weaker than the total Southern California rate of 8.2% or both the unadjusted state unemployment rate of 8.1 %.

The Inland Empire housing economy continues its expansion phase; total closings for 2Q13 were up 6 % from the first quarter of 2013 with 1,343 homes closed and up a whopping 51 % over 2Q12. Starts for the second quarter 2013 were 1,362 up 4 % from first quarter and up a staggering 41 % compared to 2Q12, which had 962 starts. The annual starts rate was 5,376 homes an increase of 67 percent compared to the 3214 homes started in the 12 months ending June 2012, but more importantly the annual starts rate has achieved a level not seen since 5,000 units were started in the 12 months ending in March 2010. Annual closings totaled 5,131 new homes an increase of 32 percent when, compared with 3,473 new homes closed in the year ending June 2012 however returning to the momentum of 1Q2011 when 4,781 homes were closed in the previous 12 months. “New energy efficient well designed homes are selling well,” said Johnson.

Single family inventory which is comprised of units under construction, finished vacant units and model homes totaled 3,401 units (Not defined as sold or unsold) at the end of the second quarter of 2013 increasing by less than 1 % over first quarter to a improved 8 month supply. Finished vacant inventory in the Inland Empire has increased less than 1 % compared to first quarter and included 1,033 homes in the second quarter 2013 a 2.4 months of supply; representing 30 % of the total inventory (UC/FV). Historically in a balanced market, finished Vacant represented 18 % to 20 % of total inventory. “Unfortunately this momentum is hard to maintain as builders are running out of homes ready for move in,” said Johnson.

VDL inventory decreased less than 3 % since first quarter 2013 and there are now 15,445 vacant developed lots in the Inland Empire representing a 34.5 months of supply. “Many builders are now grading lots close to employment centers which should come on line in 2014,” said Johnson.

For information contact:
steve johnson @ 951.848.3100
email sjohnson@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.