The Charlotte housing market shows slow steady growth in the second quarter
(Charlotte, NC – August 16, 2013) Charlotte’s housing market is slowly recovering, although the unemployment numbers keep rising, 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.
Nationally, July’s unemployment rate decreased to 7.4%. Private sector job gains support the outlook for a continued moderate, but subpar, growth path for this year. Real GDP is expected to rise just 1.7 percent in 2013 and 2.4 percent in 2014. “It is most likely that the sequestration process will create a much larger drag on our economy, later this year. The good news is Consumer confidence rose 7.1 points to 81.4 in June,” said Bill Miley, Regional Director of Metrostudy’s Charlotte Market, the bad news is the Charlotte MSA’s unemployment rate increased in June to 9.3% and job growth has remained flat for the year at just under 21,000.
For the second quarter ending June 2013, Charlotte’s quarterly starts for all product types were 2,260, a substantial increase over last quarter’s 1,956. 2Q13 starts were 36.1% higher than the 1,660 quarterly starts from a year ago in 2Q12. Charlotte’s annualized starts (rolling four quarters) as of second quarter rose to 7,812, higher than last quarter’s 7,200 annual starts. Annual starts have increased for seven consecutive quarters. 2Q13 Closings totaled 1,895 new homes, 184 more than last quarter’s. Compared to one year ago, Charlotte’s 2Q13 closings increased by 11.3%. The 7,056 annualized 2Q13 closings for all product types rose from last quarter’s year over year total of 6,864. Annual closings have gradually increased for six consecutive quarters. No doubt total closings have been held down due to the lack of finished inventory available to close. “Our original year end growth projection of 12 to 16% for 2013 appears low relative to starts for the first half of 2013. Our expectations are now for a 25-30% increase in starts with closings up 15-20% over last year,” said Miley.
Total inventory of homes in all stages of construction (Model Homes + Finished Vacant + Under Construction) rose in the second quarter to 4,382, representing a 7.5 -month supply. Housing Inventory supply increased due to Charlotte’s strong quarterly starts. A 6-8 month supply of inventory is considered to be in equilibrium. South Carolina (York and Lancaster) had the lowest inventory supply at 6.5 months. When viewed relative to Annual Closings, the 1,251 units of Finished Vacant Inventory for all product types represent a 2.1-month supply, down from 2.3 months’ that existed at the end of 1Q13. More new homes were closed than new ones completed in 2Q13, thus lowering the finished Vacant Inventory months of supply.
The 30,273 Vacant Developed Lots in the market at the end of 2Q13 continued its downward trend. There were 2,260 lots absorbed via new starts in 2Q13 while only 647 new developed lots added to our supply. Relative to lot absorption, the 30,273 vacant developed lots in Charlotte represent a 46.5 month supply, decreasing from the 60- month supply at the end of last year. Union County and North Mecklenburg had the lowest lot supplies at 31.2 and 31.6 months respectively and are close to equilibrium levels (25-30 months).
“At the risk of sounding like a broken record, the key to a strong Charlotte new housing recovery is quite simply more jobs. Our unemployment rate continues to rise as more and more people return to the labor force in search of employment. Despite the weak economic numbers, the Charlotte MSA ranks ninth in the country in single-family permits. This is a strong future indicator of continued new housing starts activity,” said Miley.
For information contact:
Bill Miley @ 704.650.7584
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.