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 »

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.

Inland Empire’s new housing market turns up in 4Q12

Posted in Inland Empire Market | Posted on 02-05-2013 | Written by Metrostudy News

(Riverside, CA–February 5, 2013) The Inland Empire regional economy has posted positive employment numbers at 12,600 jobs gained year over year thru December 2012, 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 continuing trend of positive job growth mirrors the adjacent counties however the Inland Empire is primarily a commuter market the adjacent Coastal Counties are all exhibiting strong white collar job growth,” said Steve Johnson, director of Metrostudy’s Inland Empire Region. Orange County with a + 13,700 person increase over December 2011 total employed and San Diego with 20,300 person increase over December 2011. L.A. County is up 69,500 employed persons over December 2011. With an unadjusted unemployment rate at 10.9 % the Inland Empire remains weaker than the total Southern California rate of 9.4% or both the unadjusted state unemployment rate of 9.8 % and national unemployment rate of 7.8 %.

The Inland Empire housing economy has turned the corner; total closings for the 4Q12 were up 19 % from 3Q12 with 1,376 homes closed and up 28 % over fourth quarter 2011. Starts for the 4Q12 were 1,204 down 11 % from 3Q12 and up 45 % compared to the fourth quarter of 2011 which had 826 starts. The annual starts rate was 4,186 units an increase of 24% compared to the 3,294 homes started in the 12 months ending December 2011. Annual closings totaled 4,227 new homes an increase of 19% when, compared with 3,540 new homes closed in the year ending December 2011.

Single family inventory which is comprised of units under construction, finished vacant units and model homes totaled 3,234 units at the end 4Q12 decreasing by 5 % over third quarter to a 9.2 MOS. Finished vacant inventory in the Inland Empire has decreased 6 % compared to 3Q12 and included 1,176 homes in the 4Q12 representing 36 % of the total inventory. “Historically in a balanced market finished vacant represented 18 % to 20 % of total inventory,” said Johnson.

“VDL inventory decreased 4 % since third quarter 2012 and there are now 16,664 vacant developed lots in the Inland Empire representing a 47.8 month supply compared to fourth quarter 2011 when there was a 67 month supply. This may seem high however most VDL’s in the market are far from core markets,” said Johnson.

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

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data collected by a staff of 650, the company is recognized for its consulting expertise on development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

California…What’s Old is New Again

Posted in Inland Empire Market, Southern California Market | Posted on 01-30-2013 | Written by Steve Johnson

California’s newest governor recently announced that the state was once again in the black after years of double digit billion dollar red ink budgets…whether the state ACTUALLY balances it’s financial condition remains to be seen.  Regardless, perhaps this is the beginning of good news coming from a state where the budget is 97.6 billion dollars.

California is an interesting place to say the least; Disneyland opened in July of 1955 and added a second park, California Adventure, in February 2001. However, the new park was underwhelming to most visitors expecting it to live up to the brand. Disney Imagination out did itself with the recently opened Cars Land based on the successful movie Cars and attendance has been off the charts this year for the entire Magic Kingdom.

Economic corrections are easy to spot in California as they are frequently preceded by significant investments in Real Estate by national and international investment groups.  The interest by China Development Bank in investing 1.7 billion dollars in Lennar’s proposed 10,000 unit Hunters Point and 8,000 unit Treasure Island reuse projects in San Francisco drew a lot of attention, but the Canadian firm Brookfield’s purchase of the 2,300 lot remainder of the Howard Hughes planned community, Playa Vista in Los Angeles, should also be noted as a turning point. This project has survived more real estate cycles than any other planned community in Southern California due to the legendary decade’s long approval process.

Further south, the Rancho Mission Viejo Company in Orange County which developed the planned community Mission Viejo in the 1960’s, will bring to market the first phase of its 23,000 acre remainder parcel of Rancho Mission Viejo. The initial neighborhood will be 940 home sites and 285 sites targeted to senior home buyers. In addition, the renaissance of the Orange County housing markets will further be fueled by the redevelopment of the El Toro Marine Air Base into the Great Park Neighborhood’s; the initial first phase will bring 726 home sites into the constrained new home market.

All of this proposed growth is poised to support the correcting coastal economic zone which typically has higher percentages of white collar jobs and a higher educated work force which earns significantly more annual household incomes than inland counties, cities, and counties throughout the state, still struggling with the recession, are poised to return to the same old challenge of interpreting a national or state recovery as a good time to increase or reinstate builder fees.

Finally, for every action there is a potentially equal and opposite reaction.  The new home builder may soon be challenged by the familiar whipsaw of increasing labor, materials and governmental costs as builders attempt to provide an affordable home in these inland commuter markets where new home buyers often drive until they qualify.