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.

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
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.

The Tampa Bay market gained 35,900 jobs (Annual Rate) as of 1Q13, a rate of 3.1%. For the twelve months ending March 2013, Tampa was eleventh in the nation for job creation and tops in Florida. The Tampa unemployment rate decreased during the quarter to 6.9% NSA. The local unemployment rate fell below the national average of 7.5% SA and slightly below the statewide unemployment rate of 7.0% NSA. “One year ago, the unemployment rate in Tampa was 9.1% NSA. For the first time in several years Tampa was below the state and national unemployment rate,” said Tony Polito, regional director of Metrostudy’s Tampa and Sarasota Markets.

In Tampa, 1,480 single-family units were started in the 1Q13. This represents an increase of 46.2% compared to last year’s rate of 1,012 units. The annual starts rate, compared to last year, increased by 33.9%, to 5,583 annual starts. “The Tampa new housing market exceeded our forecast for 2012 starts and the great start to 2013 has created a revision to our 2013 starts forecast. We now expect new starts by the end of 2013 to be between 11 and 27% higher than 2012 level of 5,115 (5,700 – 6,500 new units),” said Polito. Single-family quarterly closings totaled 1,278 units, which is 29.9% higher than the 984 closings during 1Q12. The annual closings rate was 5,216 units which was 26.4% above the annual rate of 4,128 units closed for the twelve months ending 1Q12.

Total single-family inventory, which is composed of units under construction, finished vacant and models equaled 3,607 units on the ground at the end of the 1Q13; an 8.3 MOS. Inventories grew by 11.3% compared to 1Q12. Compared to last year, the number of units under construction rose by 579 homes to 1,726 homes. Finished vacant inventory decreased by 11.9% from 1,819 units last year to 1,602 this year. However, the number of completions exceeded move-ins during the quarter and finished vacant inventory increased by 49 units vs. 4Q12. “The level of finished vacant housing units remains above the equilibrium level at 2.5 months but by September 2013, the level should be near the 2.0 months of supply level,” said Polito.

This quarter, 407 lots were delivered to the Tampa market. This same quarter a year ago, we delivered 797 lots.

Vacant developed lot inventory stands at 28,346 lots, a decrease of 8.7% compared to 31,041 lots last year. Based upon the annual start rate, this level of lot inventory represents a 60.9 MOS, a decrease of 28.5 months compared to last year. “Hillsborough County currently has a 24.4-month supply of developed lots, an equilibrium level.  Because lot development is not keeping up with the new starts demand, lot supply could drop below an equilibrium level by mid 2014,” stated Polito.

“The major factors going for continued improvement in new housing demand will be an improvement in consumer confidence and general continued improvement in the national economy” said Polito.  Of course, the single greatest factor will be local job creation.  The housing market can handle higher interest rates as long as job creation and low unemployment rates exist in the Tampa market.  Job creation is pushing our unemployment rate down, but Tampa is still above what most economists consider the “full employment level” of 5% unemployment.

For information contact:
tony polito @ 813.888.5151
email tpolito@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 North Port/Bradenton/Sarasota-Bradenton MSA added 2,900 jobs (Annual Rate) based on the Bureau of Labor Statistics report for 1Q13, an annual growth rate of 1.2%. According to the Florida Agency for Workforce Innovation, the March 2103 unemployment rate stood at 6.7% (NSA), below the national average of 7.5% (SA) and the Florida rate of 7.0% (NSA). “One year ago, the jobless rate was 8.8%, reflecting an improvement over the last twelve months in Sarasota/Bradenton,” said Tony Polito, regional director of Metrostudy’s Tampa and Sarasota Markets.

In Sarasota/Bradenton, 895 single-family units were started in 1Q13. This represented an increase of 70.5% compared to last year’s rate of 525 units. The annual start rate compared to last year increased by 42.2%, to 2,829 annual starts. “For 2013, we initially anticipated between 7 and 15% growth in housing starts above 2012 or somewhere between 2,600 and 2,850 new housing starts. With the enormous first quarter, we now believe the range to fall between 2,700 and 3,200 starts or 10 – 30% increase,” said Polito. Single-family quarterly closings totaled 732 units, which was 38.9% higher than the 527 closings in 1Q12. The annual closings rate was 2,479 units per year, which was 25.1% above the annual closings rate of 1,982 units per year in the same quarter last year.

Total single-family inventory, which is composed of units under construction, finished vacant and models, equaled 1,515 units on the ground at the end of 1Q13, a 7.3 MOS. Inventories increased by 30.0% compared to1Q12. Compared to last year, the under construction inventory rose by 373 units to 1,025. Finished vacant inventory decreased by 5.4% from 349 units last year to 330 this year. The number of completions exceeded move-ins during the quarter and FV inventory increased by 66 units. “This represents some much needed available inventory for quick move-in.  Both Manatee and Sarasota Counties were below an equilibrium level of finished vacant units over the last six months – a stark difference when compared to 2006 thru 2011.  The Sarasota/Bradenton new home market functions best with between a 1.5 and 2.0 month supply of FV homes.  Combined these two counties had just a 1.0 month supply of FV home at December 31, 2012.

This quarter 1,256 lots were delivered to the Sarasota- Bradenton market, primarily from the 960 new lots added to the survey in Manatee County with 721 of those lots as new sections of existing subdivisions.  Vacant developed lot inventory stands at 38,645 lots, a decrease of 1.9% compared to 39,375 lots last year. Metrostudy continues to survey 29,503 vacant developed lots in Charlotte County.  At the end of 1Q13, Manatee County had a 36.0 MOS, down from a 55.9 MOS of VDL in 1Q12. Sarasota County had a 52.2 MOS in 1Q13, down from 80.6 MOS in 1Q12. “Manatee County is quickly moving to an equilibrium level of 24 months of vacant developed lots,” said Polito.

“The major factors for continued growth in the new housing sector going forward will be: A) retiree sentiment and northern real estate markets and B) consumer confidence and general continued improvement in the local job market,” said Polito.  Retirees are a significant source of market demand and will continue to be as more “Boomers” reach retirement age over the next decade.

For information contact:
tony polito @ 813.888.5151
email tpolito@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 Charlotte MSA’s annual job growth numbers continues to disappoint. It has dropped from 28,900 in November to 19,000 in March.  Industry sectors showing the greatest Annual job growth are Leisure and hospitality at 7,100 followed by Professional and Business Services with 4,400. The Charlotte MSA’s current unemployment rate continues to decrease, now  at 8.8%, but it’s still significantly higher than the national rate.  “It’s the mysterious  civilian labor force black hole that continues to swallow people the government says  have quit looking for jobs, thus lowering the employment rate”  said Bill Miley, Regional Director of Metrostudy’s Charlotte Market.

For the first quarter ending March 2013, Charlotte’s quarterly starts for all product types were 1,933, up from last quarter’s 1,674. The 1Q13 starts were 40.5% higher than the 1,376 starts from a year ago in 1Q12. Charlotte’s annualized starts as of first quarter increased to 7,166, a 28.5% increase over annual starts from one year ago. 1Q13 Closings totaled 1,715 units unchanged from fourth quarter which is traditionally one of our strongest closing quarters. “Closings continue to be constrained by low supplies of finished inventory for all product types which decreased from a 2.5 month supply in fourth quarter to a 2.2 month supply after 1Q13,”said Miley.  Charlotte’s first quarter closings increased by 20.0% compared to 1Q12. The 6,850 homes closed in the past four quarters represented a 13.6% increase over 1Q12’s annualized closings.

Total Inventory of new homes in all stages of construction increased to 3,988 in 1Q13 from last quarter’s 3,770 due to strong quarterly starts. Total Inventory rose to a 7.0 month supply from last quarter’s 6.9. Under construction homes increased to a 4.1 month supply, finished vacant fell to 2.2 months and model homes remained at 0.6. The South Carolina market consisting of York and Lancaster counties had the lowest inventory supply at 5.8 months. A 7-8 month supply of inventory is considered to be in equilibrium. When viewed relative to Annual Closings, the 1,278 units of finished vacant inventory for all product types, decreased to a 2.2-month supply from 4Q’s 2.5 MOS. “Charlotte continues to close more homes each quarter than new ones are completed. This lowers the monthly supply and is the catalyst for increased quarterly starts,” said Miley.

The total number of vacant developed Lots in the market at quarter’s end was 31,574. Relative to starts, this represented a 52.9 month supply, rapidly dropping from the 59.1 month supply at the end of 4Q12. We should be approaching a 40 month supply by year’s end and back within equilibrium by the middle of next year. 1,933 vacant lots were absorbed in new starts while 954 new lots were delivered. A 26-30 month supply is considered to be within equilibrium. “As annual starts continue to increase, vacant lots will disappear significantly faster than newly developed lots are delivered. This is not expected to change in the foreseeable future.  “Don’t be misled, said Miley, vacant lots in the best locations are already owned or under contract to the major builders.

“Despite low job growth, new housing activity is heating up in Charlotte. Annual single family permit activity is up 42.7% and actual physical starts are up 28.5%, which means we will continue to see more new housing starts in the months ahead,” said Miley.

For information contact:
Bill Miley @ 704.650.7584
email bmiley@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 most significant news recently for the Jacksonville market was the employment estimate revision. Before the revisions, Jacksonville’s fall and winter employment market was estimated to be growing at less than 1%. With the revisions, the employed workforce was revised to a growth rate between 2% and 3% from the fall thru Feb. “This is a huge difference, with over 10,000 added jobs originally uncounted, and is especially important since Jacksonville’s housing market relies on jobs to grow (unlike South Florida with retirees and international buyers/investors),” said Anthony Crocco, Regional Director of the Metrostudy’s Orlando and Jacksonville Markets. In the Jacksonville MSA, the number of jobs has increased by 17,900 jobs over the 12 months through February 2013, representing an increase of 3.0%.

In the Jacksonville Market, 1,131 single-family units were started in the first quarter of 2013. This represents an increase of 44.3% compared to last year’s rate of 784 units. Figure 4 notes the annual starts and closings rates while the quarterly rate is shown graphically in Figure 5. The annual starts rate compared to last year increased by 39.2% to 4,056 annual starts. Single-family quarterly closings totaled 975 units which is 25.5% higher than the 777 closings in the same quarter last year. The annual closings rate totaled 3,609 units, which is 26.5% above the rate of 2,853 units per year recorded a year ago. “Both quarterly starts and closing rates for the first quarter of 2013 were well above last year’s first quarter rates and grew nicely from fourth quarter. Since builders have a significant backlog of new sale contracts, we expect continued growth in starts and closings over the next two quarters, at least,” said Crocco.

Total single-family inventory, comprised of units under construction, finished vacant units and models, equaled 2,295 units on the ground at the end of the first quarter, a 7.6 months of supply. Overall, housing inventories increased by 24.2% compared to last year. Compared to last year, under construction inventory rose 53.4%, or 460 units to 1,322. Finished vacant inventory decreased by 1.5% from 784 units last year to 772 this year. Model home inventory is down 1 unit from last year to 201 total models. “Builders in this market are closing 18.0 homes per year per model compared to 14.1 last year,” said Crocco.

This quarter, 782 lots were delivered to the Jacksonville market, a 159.8% increase from 301 lots delivered in the same quarter last year. Vacant developed lot inventory stands at 19,354 lots, a decrease of 10.8% compared to 21,697 lots last year. Based upon the annual starts rate, this lot inventory represents 57.3 months of supply, a decrease of 32.1 months from last year. “Increases in housing inventory are mostly in under construction units, indicating strong end user demand. We anticipate low finished inventory levels in the near term, given the backlog of contracts for most builders,” said Crocco.

“The new home market is growing throughout Jacksonville, with the “A” locations leading the way in absorption and pricing growth. While demand is increasing in weaker locations, pricing power is weak in all but the “A” locations. We expect slower growth in activity but accelerating pricing increases in the best locations, at least thru the summer, as builders work thru sales backlogs and try to maintain profitability with rising costs,” said Crocco.

For information contact:
anthony crocco @ 407.875.9090 x820
email acrocco@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.