INLAND EMPIRE 2Q15: Affordability Continues to be an Issue; Limited Inventory Driving Buyers to the Resale Market

Posted in Inland Empire Market, Southern California Market | Posted on 08-11-2015 | Written by Metrostudy News

  • 2Q15’s Annual Starts stand at 6,371, up 6.6% from 1Q15. Year-over-year annual starts experienced a 25.3% jump from 2Q14 levels.
  • Housing affordability and loan qualifying still remains an issue as it pertains to new home development and sales.
  • There is an approximate $126k difference between a median- priced new and median-priced resale home in the Inland Empire, due in part to limited inventory of new product that can directly compete with existing resale inventory in prime locations.

AUGUST 2015 – Metrostudy’s 2Q15 survey of the Inland Empire’s new home market shows that starts and closings collectively finished the quarter with Annual Starts increasing from 5,975 in 1Q15 to 6,371 in 2Q15 or up 6.6%. Year-over-year annual starts experienced a significant jump from 5,084 starts in 2Q14 or +25.3%. The current housing inventory monthly supply stands at 10.0 months, slightly higher than 9.3 months in 1Q15. For the same period a year earlier, housing supply stood at 8 months. Vacant Developed Lots decreased from 16,030 lots in 1Q15 to 15,563 lots in 2Q15, with monthly supply dropping from 32.2 months to 29.3 months during the same period. Annual Closings increased from 5,052 in 1Q15 to 5,267 in 2Q15, or up approximately 4.3%. Since 1Q15, quarterly closings have increased 6.8%.

“In general, the Inland Empire is experiencing a relatively stable economic environment,” said Dennis Handler, Director of Metrostudy’s Southern California region. “Optimism for gradual economic improvement remains strong and expected to continue through the end of 2015. Housing affordability and loan qualifying still remains an issue as it pertains to new home development and sales. Today, there is an approximate $126k difference between a median- priced new and median-priced resale home in the Inland Empire, due in part to limited inventory of new product that can directly compete with existing resale inventory in prime locations. However, the factors that fuel demand for new home sales are favorably projected to move steadily in a positive direction throughout the balance of the year and into 2016.”

The highest volume of 2Q15 starts occurred in the following price segments: $300k – $400k (38% of starts) and $400k – $500k (32%). Approximately 80% and 82% of housing inventory and VDL inventory falls below the $500k range, respectively.

Starts by County (1Q15 to 2Q15)

  • Riverside County quarterly starts increased from 928 to 1,193 (+28.5%), and annual starts increased from 3,928 to 4,041 (+2.9%).
  • San Bernardino County quarterly starts increased from 585 to 670 (+14.5%), and annual starts increased from 2,047 to 2,330 (+13.8%).

Closings By County (1Q15 to 2Q15)

  • Riverside County quarterly closings decreased from 894 to 887 (-0.7%), and annual closings increased from 3,428 to 3,587 (+4.6%).
  • San Bernardino County quarterly closings increased from 386 to 480 (+24.3%), and annual closings increased from 1,624 to 1,680 (+3.4%).

Vacant Developed Lot Inventory (1Q15 to 2Q15

  • Riverside County VDL’s decreased from 8,406 lots to 7,862 lots (-6.5%). VDL monthly supply is 23.3 months.
  • San Bernardino County VDL’s increased from 7,624 lots to 7,701 lots (+1%). VDL monthly supply is 40 months.

“Due to the recession, demand for new homes fell sharply, which forced builders to focus on selling off existing inventory before renewed builder confidence gradually reentered the market to ramp-up inventory again,” said Handler. “Within the past few years, employment gains have increased at a faster pace than the increase in housing supply, which now has created a situation of strong demand relative to limited supply, especially at the lower-to-middle range of the housing price spectrum. Consequently, permit activity for both single-family and multi-family construction has experienced a moderate upward trend.”

In 2Q15, the Inland Empire real estate market experienced similar characteristics to the broader Southern California market. Resale transactions ramped up due primarily to typical seasonal buying patterns. Albeit, the market is showing some strength with increased listings and closings, moderate price appreciation, shorter days-on-market, and higher absorption rates, but the question remains is this a trend that can be sustained throughout the balance of the year.

New construction annual starts and annual closings have continued to display further separation as closings maintained a fairly flat trend through 1Q15 and showed a slight upward shift in 2Q15. The pipeline of vacant developed lots that feeds housing inventory rests at just over a 29-month supply, while housing supply is currently at a 10-month supply and rising again. Since the 2Q14, finished vacant home supply has increased from three to four months, which indicates the market is still dragging due primarily to ongoing home buyer affordability issues and available product inventory at lower price points.

For information contact: Dennis Handler
email: dhandler@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.

INLAND EMPIRE HOUSING 1Q15: A Market in Search of Qualified Buyers; Affordability Issues are Key

Posted in Inland Empire Market, Southern California Market | Posted on 05-20-2015 | Written by Metrostudy News

  • Metrostudy’s 1Q15 survey shows the Annual Starts rate in the Inland Empire is up 23.1% YoY;
  • Affordability concerns are keeping potential buyers in the rental market, with rental occupancy rates averaging 95% across Southern California
  • The difference between new and resale median prices is over $135,000 in the Inland Empire, with less than 30% of home buyers currently able to afford a new home

May 2015 – Metrostudy’s 1Q15 survey of the housing market in the Inland Empire showed the annual starts rate at 6,002, up 6.8% from 4Q14. Year-over-year annual starts experienced a significant jump from 4,875 starts in 1Q14 or up 23.1%. The current housing inventory monthly supply stands at 9.5 months, not much different than 4Q14, but it is 2.3 months higher than 1Q14. Vacant Developed Lots increased from 16,597 lots in 4Q14 to 17,002 lots in 1Q15, with monthly supply dropping from 35.5 months to 34 months during the same period. Annual Closings increased from 4,795 in 4Q14 to 5,059 in 1Q15, or up approximately 5.5%. Since 4Q14, quarterly closings have decreased from 1,490 to 1,296 or down 13%.

 “The highest volume of 1Q15 starts occurred in the following price segments: $300k – $400k (37% of starts) and $400k – $500k (28%),” said Dennis Handler, Director of Metrostudy’s Southern California region. “Approximately 81% and 85% of housing inventory and VDL inventory falls below the $500k range, respectively.

Starts by County (4Q14 to 1Q15)

Riverside County starts increased from 702 to 945 (+34.6%), and annual starts increased from 3,790 to 3,956 (+42.6%).

San Bernardino County quarterly starts increased from 490 to 583 (+19%), and annual starts increased from 1,827 to 2,046 (+12%).

Closings By County (4Q14 to 1Q15)

Riverside County closings decreased from 1027 to 910 (-11.4%), and annual closings increased from 3,246 to 3,444 (+6.2%).

San Bernardino County closings decreased from 463 to 386 (-16.6%), and annual closings increased from 1,549 to 1,615 (+4.3%).

Vacant Developed Lot Inventory (4Q14 to 1Q15)

Riverside County VDL’s increased from 8,804 lots to 8,995 lots (+2.2%). VDL monthly supply is 27.3 months.

San Bernardino County VDL’s increased from 7,793 lots to 8,007 lots (+2.7%). VDL monthly supply is 47 months.

In 1Q15, the Inland Empire real estate market experienced similar characteristics to the broader Southern California market, as resale transactions dropped off considerably. However, resale inventory remains fairly strong at a 6-month supply and prices of both new and resale homes have displayed positive appreciation. Unfortunately, the average days on market for resale homes remain in the 115-day range with no foreseeable change in this trend. New construction annual starts and annual closings have continued to display further separation as closings maintained a fairly flat trend through half of 1Q15 while starts began to accelerate. Since 2011, annual starts and closings have more-or-less been in-line with each other offering positive energy and confidence for the builder community. In addition, inventory levels have begun to creep up, specifically finished vacant home inventory. Overall, the Inland Empire market appears to have lost some momentum due to a drop in consumer demand and limited affordable product supply.

“Fundamentally, the economic conditions are favorably moving in the right direction due to consistent job growth and lower unemployment, low interest rates, and growing consumer confidence,” said Handler. “Affordability and number of qualified buyers are still primary factors that have a significant impact on the new home buyer market. The difference between new and resale median prices is over $135,000 in the Inland Empire, with less than 30% of home buyers currently able to afford a new home, which combined with limited product inventory at the lower-end of the price spectrum, has major implications on the home building industry through the balance of 2015. Alternatively, the rental market continues to benefit as rental rates are expected to remain stable with occupancy rates averaging 95% across Southern California.”

In general, the Inland Empire is experiencing a relatively stable economic environment. Optimism for gradual economic improvement remains strong and expected to continue through 2Q15. The job market is also maintaining a steady flow of new jobs with unemployment rates continuing to move closer to the national average. Interest rates are still low, with no foreseeable increase in the short-term, and the housing market is also operating at a stable and manageable pace.

For information contact: Dennis Handler
email: dhandler@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.

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.

bb

 

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 »

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 »

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.

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.

The Inland Empire market gains momentum in the first quarter

Posted in Inland Empire Market | Posted on 05-09-2013 | Written by Metrostudy News

(Riverside, CA – May 9, 2013) The mild recovery in the construction market is holding back the Inland Empire from a more energetic recovery as those jobs would produce many multiples throughout the economy, 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 regional economy has posted positive employment numbers at 23,500 jobs gained year over year thru March 2013. “This solid trend of positive job growth is exciting as the recovery may be anemic but it is sustaining forward momentum over time throughout the Inland Region,” said Steve Johnson, Regional Director of Metrostudy’s South California, Inland Empire and San Diego markets. With an unadjusted unemployment rate at 10.5 % the Inland Empire remains weaker than the total Southern California rate of 9.0% or both the unadjusted state unemployment rate of 9.4 % and national unemployment rate of 7.6 %.

Total closings for the first quarter 2013 were down 7 % from the fourth quarter of 2012 with 1,277 homes closed as builders ran out of inventory and up a whopping 57 % over first quarter 2012. Starts for the first quarter 2013 were 1,495 up 18 % from fourth quarter and up a staggering 128 % compared to the first quarter of 2012 which had a mere 653 starts. The Annual Starts rate was 5,097 units an increase of 19 % compared to the 4,255 homes started in the 12 months ending December 2012 but more importantly the annual starts rate has achieved a level not seen since 5,000 units were started in 1Q2010. Annual Closings totaled 4,703 new homes an increase of 10 % when, compared with 4,237 new homes closed in the year ending December 2012 however returning to the momentum of 1Q2011 when 4,781 homes were closed. Home builders are staffing up and searching the market for sites which they can rapidly bring to market for new subdivisions,” said Johnson.

Single family inventory totaled 3,508 units at the end of the first quarter of 2013 increasing by 6 % over fourth quarter to an improved 9 month supply. Finished vacant inventory in the Inland Empire has decreased 11 % compared to fourth quarter and included 1,046 homes in the first quarter 2013 representing 30 % of the total inventory. Historically in a balanced market finished Vacant represented 18 % to 20 % of total inventory. “Most of the finished inventory in the market is already spoken for as home buyers clamor for product they can move into before school starts,” said Johnson.

VDL inventory decreased less than 3 % since fourth quarter 2012 and there are now 16,000 vacant developed lots in the Inland Empire representing a 37.7 months of supply. “Many home builders are facing the dismal supply of lots in the closer in markets with renewed interest in raw land with existing building approval from local jurisdictions,” said Johnson.

“Some say it was January 3, 2013 when all the home builders in Southern California woke up early in the morning and smelled recovery in the air. They went to work in those first weeks of the new year and began to hear from their sales teams at their new home projects that traffic was up and these consumers were not just kicking tires but were serious about buying a new home,” said Johnson.

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

About Metrostudy

Metrostudy, a Hanley Wood company, is the largest provider of comprehensive research and insight for the real estate industry. Builders, developers, banks, manufacturers, retailers and many other industries all rely on Metrostudy’s data and analytics to support strategic business decisions at the local, regional and national market level. 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 market gains momentum in the first quarter

Posted in Inland Empire Market | Posted on 05-07-2013 | Written by Metrostudy News

(Riverside, CA – May 7, 2013) The mild recovery in the construction market is holding back the Inland Empire from a more energetic recovery as those jobs would produce many multiples throughout the economy, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary databaseon residential construction in the US housing market.

The Inland Empire regional economy has posted positive employment numbers at 23,500 jobs gained year over year thru March 2013. “This solid trend of positive job growth is exciting as the recovery may be anemic but it is sustaining forward momentum over time throughout the Inland Region,” said Steve Johnson, Regional Director of Metrostudy’s South California, Inland Empire and San Diego markets. With an unadjusted unemployment rate at 10.5 % the Inland Empire remains weaker than the total Southern California rate of 9.0% or both the unadjusted state unemployment rate of 9.4 % and national unemployment rate of 7.6 %.

Total closings for the first quarter 2013 were down 7 % from the fourth quarter of 2012 with 1,277 homes closed as builders ran out of inventory and up a whopping 57 % over first quarter 2012. Starts for the first quarter 2013 were 1,495 up 18 % from fourth quarter and up a staggering 128 % compared to the first quarter of 2012 which had a mere 653 starts. The Annual Starts rate was 5,097 units an increase of 19 % compared to the 4,255 homes started in the 12 months ending December 2012 but more importantly the annual starts rate has achieved a level not seen since 5,000 units were started in 1Q2010. Annual Closings totaled 4,703 new homes an increase of 10 % when, compared with 4,237 new homes closed in the year ending December 2012 however returning to the momentum of 1Q2011 when 4,781 homes were closed. Home builders are staffing up and searching the market for sites which they can rapidly bring to market for new subdivisions,” said Johnson.

Single family inventory totaled 3,508 units at the end of the first quarter of 2013 increasing by 6 % over fourth quarter to an improved 9 month supply. Finished vacant inventory in the Inland Empire has decreased 11 % compared to fourth quarter and included 1,046 homes in the first quarter 2013 representing 30 % of the total inventory. Historically in a balanced market finished Vacant represented 18 % to 20 % of total inventory. “Most of the finished inventory in the market is already spoken for as home buyers clamor for product they can move into before school starts.,” said Johnson.

VDL inventory decreased less than 3 % since fourth quarter 2012 and there are now 16,000 vacant developed lots in the Inland Empire representing a 37.7 months of supply. Many home builders are facing the dismal supply of lots in the closer in markets with renewed interest in raw land with existing building approval from local jurisdictions,” said Johnson.

“Some say it was January 3, 2013 when all the home builders in Southern California woke up early in the morning and smelled recovery in the air. They went to work in those first weeks of the new year and began to hear from their sales teams at their new home projects that traffic was up and these consumers were not just kicking tires but were serious about buying a new home,” 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.