(Baltimore, MD – May 16, 2013) The outlook for the new home market is beginning to brighten. 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 Baltimore MSA saw some improvement to job growth, adding 30,300 jobs over the same time period. The unemployment rates in both the DC area and Baltimore continue to be below the national average of 7.6%, coming in at 5.2% and 7.0%, respectively. Baltimore has edged nearer to the national average in recent months though which is reflective of historical norms. “The Washington DC and Baltimore regions continue to have some of the tighter labor markets in the country,” said Melissa Jonas, regional director of Metrostudy’s Mid-Atlantic Market.
New homebuyer traffic was 8.4% above the level seen in 2012 in the first quarter, while contracts were up by 34%. The activity seen in the first quarter was promising, with the contracts rising by 6.5% versus 1Q12 rates. Year-over-year for the quarter, the cancellation rate fell by 22.5% to an average rate of 13.7%. New housing production continues to rise, with 1Q13 starts up 10.5% over 1Q12. The market is adding 8,328 units annually, continuing a six quarter trend of increased production. Closings in the first quarter are up 19.9% versus the previous year, marking the fifth quarter in a row with an increase in closings. Annual closings are now at 8,187 units.
Overall new housing inventories now sit at 5,914 units, which represent 8.7-months of supply. However, 36% of these new units in inventory are condominiums that are under construction or sitting finished but vacant. Condos currently have 19.6 inventory months available in the region. Removing the condos from the equation, we see that the single family and town home segments only have a 6.6- month supply of new units available, which is low. “Tightening new home inventories, combined with tightening resale inventories, are making the marketplace quite challenging for buyers. It is a great time to be a seller, as long as you have your next home secured,” said Jonas.
The number of vacant developed lots has fallen to 13,699 VDLs for the entire region. This now represents a 19.7-month of supply of lots in the overall market. However, lot supplies are falling in the core counties, where there is an average 14.4 months of supply. “As such, continued increases in activity over the next several quarters will likely result in a significant shortage of lots in core areas, pushing development outward and into the second tier submarkets, while driving up prices of the existing lots,” said Jonas.
“Looking forward we expect to see continued increases in new housing production as the recoveries in the resale market and the economy progress. In Maryland, this will begin with the Washington DC suburbs, with Baltimore lagging by several quarters or more,” said Jonas.
For information contact:
melissa jonas @ 703.244.5229
Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide. Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. www.metrostudy.com
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