The Rio Grande Valley MSA registered an annual job gain of 7,300 jobs in the year ending February 2013, a 2.0% rate. The benchmark results show a gain of 8,800 jobs (2.4%) in Year-2012, and 5,700 jobs (1.6%) in 2011. Job growth forecasts project the Rio Grande Valley to see job growth in the 2.3% range for 2013. “The local recovery has struggled to gain momentum in the past year though the revised job numbers show employment growth, namely in the sectors of transportation, and retail,” said Randall Allsup, Metrostudy’s regional director of San Antonio and Rio Grande Valley markets. The Rio Grande Valley unemployment rate as of February 2013 is 10.7%, which is down 0.5% from a year ago.

The annual rate of new home growth in the Rio Grande Valley as determined by Metrostudy’s first quarter survey is 1,773 starts. This annual rate of 1,773 is down 365 units, or 17.1%, from the 1Q12 rate of 2,019. “The expectation is that the decline is temporary as the short and long term prospects for the market are good with job growth forecasts for 2013 in the 2% range, and close proximity to a recovering Mexico,” said Allsup. The Rio Grande Valley had 412 starts in the first quarter, down 19.7% from the fourth quarter of 2012. In the Rio Grande Valley the number of new home closings in the year ending 1Q13 was 1,767 down 386 units, or 17.9%, from the 1Q12 rate of 2,153. There have been 458 closings in the 1st quarter, down 12.8% from 4Q12.

Metrostudy’s 1Q13 survey found the level of new home inventory to be high relative to the number of closings in the same period. There were a total of 1,368 homes in inventory at the end of 1Q13, which represents an 9.3 months of supply based on the annual closings rate. Metrostudy documented 685 homes under construction at the end of the first quarter, a decrease of 54 units when compared to 1Q12. “The months of supply of finished vacant units, is the key indicator of the health of housing inventory. When finished vacant inventory in the Rio Grande Valley market approaches approximately 3.0 months, builders are generally forced to begin to offer some concessions in order to move the inventory of unsold homes,” said Allsup.  The inventory of finished vacant units totaled 667 homes at the end of 1Q13, up 10% compared to the 1Q12 level of 609. Based on the closings rate for the first quarter, the current level of finished vacant inventory represents 4.5 months of supply.

“The Rio Grande Valley continues to see population growth. The increased demand for housing is currently being absorbed by an extremely tight rental market with occupancy levels over 95% and rents that continue to climb. The positive side to this is that climbing rents will help build demand for detached housing which has seen the sales pace in the resale market steady over the past few months and inventory levels are beginning to drop which will contribute to stabilizing home values, especially in more desirable areas,” said Allsup.

For information contact:
randall allsup @ 210.525.9549
email rallsup@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 San Antonio region is also experiencing rising home prices due to the stronger sales pace and the low level of new and existing homes for sale. There were just over 1,400 finished vacant homes in the San Antonio area, less than half the inventory just five years ago. Resale inventory is currently at a 5.4-month supply, a level that historically has indicated a sellers-market.   “It’s not just the strong demand and low supply driving up prices; builders are getting hit with increased lot costs, construction costs and labor costs. We expect to see home appreciation of more than 3% this year, with new home prices jumping 10% or more in good locations during 2013,” said Allsup.

The near record low interest rates is driving home affordability and allowing buyers to purchase larger, more expensive homes, and the tightness of the mortgage market making it difficult for first-time homebuyers to qualify, are combining to diver the higher priced market as Metrostudy reports that the new home market priced above $300,000 has seen growth of 44% in the past year. “The good news is that well qualified first-time homebuyers have been able to skip typical first-time product and purchase homes in what have historically been move-up price ranges,” said Allsup. The historically low interest rates are allowing buyers to bypass a normal move-up level and purchase a larger and more expensive home.

The increased starts pace and limited new lot development continues to drive down the lot inventory. Lot supply has fallen to 25-months from a peak of 43-months. The “A” locations currently only have a 12-month supply well below what is considered equilibrium. The top performing developments that account for 71% of the activity within the San Antonio region have only a combined 14-month supply of developed lots. “The extremely tight supply of vacant developed lots, which has led to higher land and lots costs, has spurred increased levels in new development planning, a trend we expect to continue through the remainder of the year,” said Allsup.

For information contact:
randall allsup @ 210.525.9549
email rallsup@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.

This is a complex story with many characters involving love, murder, betrayal, ambition, wealth, prison, escape … you name it.  It is about an orphan named Pip who was going to be a blacksmith like his beloved, adoptive father.  Along the way, however, he meets Miss Havisham, a wealthy spinster, and her adopted daughter, Estella.  As you might guess, Pip falls in love with Estella, who leads him on but does not return his affection.  Pip finds out that he has a secret benefactor, who sends him to London to become a gentleman with promises of great wealth.  He assumes the benefactor is Miss Havisham, but (spoiler alert) it turns out to be an ex-convict named Abel Magwitch who Pip had helped in the midst of a prison escape many years before … see book cover below.  Despite his wealth, it turns out Magwitch never righted himself with the authorities.  He is recaptured, goes back to jail, loses his wealth, and dies in prison.  Pip’s Great Expectations of high society and gentry die with him.

And that’s not all – not only is Miss Havisham NOT Pip’s benefactor, but she is really a jilted misandrist who was using Estella only to break Pip’s heart.  After a while, Miss Havisham is remorseful over her behavior, and fortunately – after a long, winding road apart – (another spoiler alert) Pip and Estella find each other in the end.

Please forgive me, Mrs. Frank, and all my other faithful English teachers, but I’m not much of a Dickens fan.  I had to cheat on Wikipedia to refresh my memory on the main plot and key characters.  However, I’ve thought about this book quite a bit lately as Phoenix real estate continues its recovery.  I have good expectations for the housing market this year, but many in the industry have great expectations.  Eight of the thirteen forecasters on the Phoenix Blue Chip panel see starts rising 50 percent or more in 2013.  That would be … well – great – and it still could happen, but I don’t think it will.  My forecast is for a 25 percent increase in starts, which is a pretty nice gain, but it would be the lowest forecast among the 13 Blue Chip panelists (which I am not one, by the way).  It would be a mistake to call a 25 percent increase pessimistic, but here are some factors that kept me from a more optimistic forecast for 2013:

• Tepid economy
• Labor shortage and rising construction costs
• Lot shortage in the most active submarkets
• Rising land prices leading to higher new-home prices
• Triskaidekaphobia – fear of the #13

I’m just kidding about the phobia, but the other ones are real.  The economy added roughly 40,000 jobs last year, which is in the top 10 among all metro areas.  However, it is low by Phoenix standards, and we have recovered only 110,000 of the 251,000 jobs that were lost to the recession.  This recovery measure puts Phoenix in the bottom third among major metro areas.  The Blue Chip consensus forecast for job growth this year calls for nearly 50,000 new jobs, so only a slight improvement from last year is expected.

Most of the industry is aware of the shortage of vacant developed lots, or finished lots, in Chandler, Gilbert, and Peoria.  Metrostudy formerly considered a two-year supply to be equilibrium, but three years is probably more appropriate given that we have been delivering so few lots.  That is certainly changing, but it will take a while for lot development to gear up significantly.  The chart below shows all the Metrostudy submarkets that have a three year or less supply of vacant developed lots (all product types).  If we exclude oversize lots then Queen Creek would also meet that criterion.

The increased new-home demand and the dwindling lot supply have created no small amount of urgency among the builders.  This has led to bidding wars for lots and rapidly rising land prices.  Builders are having to calculate-in aggressive home price appreciation to justify the price for the land, which is unnerving to all.  And this is also where forecasting is so critical, particularly when land development is still trying to gain traction.  The more aggressive your forecast, the more you are probably willing to pay for the lot.  It is possible that overly high expectations for housing demand this year may be leading builders to spend even more on land than they would otherwise.

This is quite a drama, but there is a consensus that it is more fun to deal with problems related to an improving new-home market than the opposite.  I do have great expectations for the Phoenix market in the next few years, but I think it may be a little longer road to travel before we find our “Estella”.

BACKGROUND

Ben Sage, Director of Metrostudy’s Arizona Region, has been researching and analyzing housing markets for seventeen years.  He has prepared hundreds of market studies in various cities around the country for numerous product types.  His knowledge and experience combined with Metrostudy’s accurate and reliable information have enabled Ben to advise many Arizona real estate firms in their risk assessment, decision making, and strategic planning.  He can be reached at (480) 756-9300, option 3 or bsage@metrostudy.com, or visit www.metrostudy.com.

Metrostudy, a national housing market research firm, conducts an onsite, lot-by-lot audit of all new home subdivisions in the Phoenix, Tucson, and Prescott metro areas.  Our survey includes all new-home subdivisions, attached and detached, whether custom or production.  Metrostudy drives over 15,000 miles every quarter to visually inspect every homesite, resulting in accurate information on starts, closings (move-ins), new-home inventory, vacant developed lot inventory, future lots, and lot deliveries.  We supplement our core information with public records – new home, resale, and foreclosure deeds – along with a weekly and monthly builder survey.

Nashville has seen 35 consecutive months of positive job creation.  The Nashville Metropolitan Statistical Area February unemployment rate of 6.4% has consistently outperformed the National and State average. Williamson County continues to lead the MSA with 5.3% unemployment, but almost all counties have shown employment improvements.

The Nashville area recorded 973 closings in 1Q13; this was down slightly compared to the previous quarter. In 1Q12 the area recorded 845 closings. The trailing 12 months of activity in the area resulted in 4,322 closings in the area through 1Q13; 3,581 homes were closed in the 12 months ending in 1Q12. Nashville recorded 1,089 starts in 1Q13. This was a slight decrease from the previous quarter’s 1,155 starts. The 66 unit decrease in starts from 4Q12 to 1Q13 represented a 6% move downward. The 12 months ending in March 2013 saw 4,763 new home starts; the 12 months ending in March 2012 recorded 3,553 new home starts, a 34% increase year over year.

Demand outpacing supply resulted in inventory reductions across the board. Total inventory is made up of models, units under construction, and finished vacant units. Total Inventory was up from 1Q12 to 1Q13. 432 additional units were added to the under construction category, as builders continue to replenish their inventory. Finished vacant inventory increased by 73 units in the same time period. “Builders continue to successfully sell their existing inventory and new starts. Even model homes are being sold as inventory tightens,” said Jason Brown, Regional Director of Metrostudy’s Nashville Market.  Three years ago, 1Q10, there were 1,302 finished vacant units; representing a supply of 3.8 months. Currently 721 units are in the finished vacant category; a rate of 2.0 months of supply.

The 12 months ending in March 2013 saw 2,607 lots delivered to the market; up 47% from the 12 months ending in March 2012 figure of 1,777. First Quarter lot deliveries of 667 were down slightly compared to the amount delivered last quarter. 4,763 homes were started in the 12 months ending in March 2013. Currently, the inventory level of 13,796 vacant developed lots represents a 22% decrease over the 1Q11 level of 17,728 lots. At current absorption rates there are enough vacant lots on the ground for slightly more than 34 months of supply. This is still above a healthy market supply level of 24 to 30 months, but the story is in the details. “As absorption levels begin to pick up along with economic recovery, the overall supply levels will eventually firm up, but we are already seeing shortages in certain submarkets,” said Brown.

“These factors combined with continued steady employment growth, the area’s lack of new home inventory, for sale listings still showing a tight supply and home values remaining stable, Nashville should expect to see continued upward movement in the new home market through the remainder of 2013,” said Brown.

For information contact:
jason brown @ 615.349.2190
email jbrown@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.

This trend of reuse is of course not new and may even go back centuries as cities in Europe were rebuilt over and over. What is different is in Southern California is that we historically have torn down and just reused the dirt. The growth of technology companies has spurred an industry which began in the late 1980’s and today reuse probably totals more than 15 million feet converted and renovated for creative office space. When we look at the total market on the Westside of L.A. it is about 45 to 50 million S.F. with about 20 percent vacant for mid-rise to high rise office, the vacancy for Creative Office on the other hand is closer to 7 percent.

How did this evolve and what is the long term impact? The Westside is an attractive destination both socially and professionally. The energy on the street is electric even at the packed coffee houses and the restaurants are some the best.  The cultivation of an iconic destination as ‘Silicon Beach’ (not unlike Silicon Valley up north or Silicon Hills in Austin, TX) supports the ’street cred” as the hip and happening place to be…right now.  With strong transportation support slated with the under construction EXPO Line connecting Santa Monica with Downtown, you have a recipe for professional and cultural success.

The only thing missing perhaps is housing.  However, even housing is undergoing a transformation as many projects are moving forward again. The renowned project Playa Vista which was started by Howard Hughes and took over 4 decades to win approval is returning to market with Brookfield as the new developer leading the way with over 1,500 units. There are several old office to apartment reuse projects planned but importantly it is a good time for residential developers to recognize the opportunity for infill development.  In many cases you can pick up sites of 5 to 10 acres that are well located to the ever expanding new urban transportation systems of the greater Los Angeles market area. New markets are evolving and we just need to think outside the box and reuse, recycle or adapt these well located sites into new urban housing.

As we enter into the home building industry’s selling season, let’s make a case for local government hiring for the sake of business development.

1)    The Current Housing Stock is Appreciating (on average): While there is no such thing as a national housing market, the national average of home price appreciation is growing.  Markets around the country are showing varying levels of home price appreciation as demand rebounds after years of anemic new home activity.  The latest Case-Shiller Index showed a 9.3% growth in the average home prices for the 20 cities in their survey.  At the same time, the last FHFA release showed a 5.5% increase on a national level.  Higher home prices translate to greater tax collections [Listen for the collective groan from homeowners, like the audience does when a kid hits the baseball into the cameraman on “America’s Funniest Home Videos”].

2)    The Current Housing Stock is Growing: Nationwide, the housing market saw 23% more starts in 2012 than it did the year before. The first quarter of 2013 has maintained that pace, so far, with 19 of the top 20 markets experiencing annual starts growth over 20%.  (NOTE: DC was the only market below that threshold though that is of little concern as the market began its recovery well ahead of nearly every market except Houston.)  The geography of market participation is as varied as the consumers who buy homes with even the hardest hit, “bubble” markets showing increased demand.  Phoenix started over 4,000 more homes in the last 12 months than it did in the previous 12 month period, while Central Florida had the third most active new home market in the country in the last year with over 13,000 starts.  For 2013, Metrostudy is calling for an 18-20% increase in new home production which would translate to 18-20% more property owners to tax [GASP!].

3)    Property Taxes Rising (in some locations): For this bullet point, I can really only speak to the local Austin market (feel free to share your market’s picture in the comments!).  According to the latest budget forecast for the city of Austin, property taxes are likely to go up (AGAIN) in the next fiscal year.  Due to the increases in community services and the current employee wage hike, tax increases and a reduction in services “is the only way to make these changes work” (their words not mine).  This is an unpleasant bullet to write but bear with me as it rolls into my overall point.

BOTTOM LINE

In terms of taxable properties of the residential classification we’ve outlined the following points: (1) the value of existing taxable property is growing, (2) the number of taxable property is growing, and (3) the tax rate (in some cases) is growing.  Now as a Texan I know better than to count my chickens before they hatch but this equation, from the homeowners perspective, translates to less money in my pocket and more to the government.  I suppose that’s ok IF the money can provide a positive feedback loop for the local economy.  The easiest conversation starter in the market has become, “how’s the permit approval process affecting your business?” Let’s put some of those extra dollars toward expanding the permit evaluation process so that we can get to the business of doing business on a more predictable time table.  Permitting fees, more taxable entities, and higher taxable values can add up continued business development in an otherwise uncertain national recovery.  There is an opening for local governments to play a positive role in this recovery.  Let’s encourage them to answer the call.

Top Rankings

• In the first quarter of 2013, total new home starts rose to 59,387 which is a 4% increase over total new home starts in the previous quarter and a 40% increase over quarterly new home starts one year earlier. An 8% improvement in annualized growth from the prior period demonstrates that 2013 is continuing the gains seen over the past year.
• In California we are seeing a strong resurgence with the Northern, Southern and Central markets residing as the top three markets in year-over-year growth and within the top five for annualized growth. While Northern and Central California also appear in the top five markets for total quarterly starts, Southern California is right behind in the sixth position with 2,944 starts.
• Completions for the first quarter predominantly followed the starts trends in market leaders for volume with some minor jockeying among the top six. For both year-over-year and annualized growth, California again topped the list but with the San Diego market, showing 160% and 25% gains respectively, along with Northern California following in second place pointing once more to the improving conditions throughout the state.
• Continuing recovery in markets within the West region is demonstrated by top five market appearances of Phoenix for quarterly starts and annualized starts, Las Vegas for year-over-year growth and Denver for annualized starts. The strong gains in starts for Phoenix cooled from the prior quarter for the first time over the past year, but the market maintained a 31% year-over-year increase.
• The 8% annualized growth when comparing the first quarter of 2013 and fourth quarter of 2012 shows an increase over the 5% annualized growth when comparing quarters from a year prior. The higher growth indicates 2013 is off to a strong start and has the potential to exceed the robust 36% increase in total starts we observed in calendar 2012 compared to the previous year.

I said in the interview that we are in a multifamily boom right now, but that single-family will remain the larger segment, and will grow faster on a percentage basis after the apartment boom slows.

We continue to forecast that single-family starts will hit 640,000 this year, and rise further to 803,000 in 2014.

Starts are up sharply in Northern California (+134% year on  year), with strong gains in Santa Clara, Contra Costa, and Sacramento, and rebounding in badly beaten-down markets like Las Vegas and northern Atlanta.  Around DC, Loudon County starts rose to 867 in 1Q, from 662 a year ago, and Fairfax County managed to start 386 as well.

I was just in southern California, and I was struck by the enormous strength there, with new releases selling out almost immediately, with waiting lists, and some escalations of $100,000 or more in a year.

I talked about the shortage of “A” lots, mentioning that we will soon be at 12 months (or less) of supply in those prime locations.  As a result, a lot of “A” submarkets are back to PEAK lot prices, or even higher than the recent peak!

This will be a year of cost pressures, but also of higher home prices.  Builder margins will be strong in the near-term, but will fall under pressure when mortgage rates start to rise again.

Listen to the interview HERE

According to the Georgia DOL, the Atlanta region created 55,200 net new positions year over year ending March 31, 2013, up 2.4%. Private sector jobs did even better creating 61,300 positions, up 3.1%.

Most job sectors were up, including construction jobs (up 2.8%) and finance jobs (up 1.4%), “This is the first time in years since such a healthy increase has been seen in these sectors and reflects what we all have been experiencing in the housing sector” said James.

In March Atlanta’s unemployment rate was still high, at 7.9% while the March National rate decreased to 7.6% but net employment is up by 128,000 jobs from three years ago and “for those who lost their jobs it should be a bit easier to find a replacement job” said James.

Another pleasant surprise was finding out that the Georgia Department of Labor revised previously release figures upwards by quite a bit (revisions are done at least once each year). For instance December 2012 was changed from 33,200 net new jobs up to 54,600. “Perhaps the healthy job growth has contributed to the strong demand in housing” said James.

According to Metrostudys’ proprietary “boots on the ground” 1Q13 field survey results, new home starts increased 60% annually. “In some cases up to 80% of the homes currently under construction have already been pre-sold,” said James.  First quarter quarterly starts were up by 68% and quarterly closings were up by 41% year over year. “We expect to see strong trends like these for the rest of the year and into next”.

Another reason housing starts are up by so much (positive job growth being a one major reason) is that inventories are at record lows. Finished housing inventory (homes 100% completely built and ready to be moved into) continued to decline by another 30% below last year levels. Only 2,431 houses are in the finished inventory category and are spread out over 22 different counties. “Fifteen years ago finished inventory was more than double where it stands today and the population had 1.3 million fewer people in the region. “No wonder home buyers are having such difficulty trying to find homes that are built and ready to move into,” said James.  Many consumers who sold their existing home and had intentions of purchasing a new home immediately are having to rent for a short period of time while they wait for their new home to be built.

One issue that could cool down the new construction boom is the short supply of finished lots on the ground in the “A” locations. “Sure we have more lots in Atlanta than any other place on Earth, but current demand for housing is very low in these areas which contain more than half of the finished and buildable lots and typically are located in exurban portions on Atlanta. But one day home prices will get so high that the days of “drive until you qualify” (for a mortgage loan) will push demand back into these exurban areas as well,” said James.

For information contact:
eugene james @ 404.370.9001 x 111
email ejames@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 Washington DC economy continues to expand, adding 39,700 jobs from February 2012 to February 2013. Currently, the MSA has 3,033,100 jobs, a slight decline from the fall of 2012. The unemployment rate in the DC area has decreased, currently at 5.2%, still significantly below the national rate of 7.6% and ranked 39th amongst MSAs. Over 1Q13, the I-81 corridor has improved in job growth. “The region as a whole added 2,700 jobs over the year. While automatic federal spending cuts have many businesses in the area feeling cautious, the labor market is holding steady for now,” said Melissa Jonas, regional director of Metrostudy’s Mid-Atlantic Market.

New homebuyer traffic was 10.4% below the level seen in 2012 in the first quarter, while contracts were up by 8%. The activity seen in the past three months was higher, with the conversion rate rising by 19% versus 1Q12 rates. Year-over-year for the quarter, cancellation rates fell by 21% to an average 10% rate, the lowest rate seen since the first quarter of 2005. New housing production increased by 36.7% versus 1Q12, which is the seventh consecutive year-over-year increase. Closings were up by 27.7% versus the same quarter last year, up for the third consecutive quarter. Annual starts were again above annual closings and higher than any time since early 2008. “Key areas, like Loudoun County, are benefiting from this increase in activity while the push into the exurbs has not manifested itself to date,” said Jonas.

Overall new housing inventories now sit at 4,941 units, which represents an 8.0-months’ supply. However, 35% of these new units in inventory are condominiums that are under construction or are sitting finished but vacant, with many of these units contained in just a handful of high-rise properties. Condos currently have 19.5 inventory months available. Removing the condos from the equation and looking only at the single family and townhome units, we find that there is roughly a 6.1-month supply of units.  “Tight new home inventories, combined with tight resale inventories, make for a difficult marketplace for buyers.  It is a great time to be a seller, as long as you have your next home secured,” said Jonas.

Vacant developed lot inventories decreased slightly again as new communities open and lots created are quickly utilized. The market has just fewer than 21,500 VDLs available at the end of 1Q13, a decrease of 563 lots over the prior quarter. Due to the increase in starts, the overall supply of lots in the region dropped to 31.6-months, a marked drop from the nearly 60 months of supply seen several years ago. Lot supplies are much tighter in the core counties where nearly three-quarters of the activity is occurring and the supply averages 12.7 months. By contrast, in several exurban areas, the supply of VDLs exceeds 175 months. “Continued demand in the core counties has made the competition for lots increase along with prices,” said Jonas.

“Looking forward, we expect activity to continue to increase, particularly in the core counties as the resale market draws down inventory. Lot shortages in these areas will likely cause activity to bleed over to the exurbs in late 2013. The result should be continued price escalation in the core and an increase in starts in second tier markets,” said Jonas.

For information contact:
melissa jonas @ 703.244.5229
email melissaj@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.