ORLANDO HOUSING 3Q17: Hurricane Disruption Minimal; Demand Continues Strong while Supply Remains Limited

  • Quarterly New Home Starts are up 6.1% YoY; Annual Starts are up 10% YoY.
  • Quarterly Closings are up 3.9% YoY while Annual Closigs are up 19.7% from 3Q16 levels.
  • This market saw only minimal disruption from Hurricane Irma, and new home base prices are increasing at most projects in the market.

Metrostudy’s 3Q17 survey of the Orlando housing market – including Lake, Orange, Osceola, and Seminole counties – shows that 3,788 single-family housing units were started in the third quarter of 2017, an increase of 6.1% compared to 3Q16’s quarterly starts rate. The annual starts rate of 13,640 units has increased by 10.0%, 1,238 units over the past year. Single-family quarterly closings totaled 3,297 units, 3.9% higher than the same quarter last year. The annual closings rate (past 4 quarters) of 13,192 units is 19.7% above the rate of 11,025 units per year recorded a year ago.

“New home starts and closings in the Orlando CBSA were down only slightly from the second quarter and were up from third quarter of 2016 even with the disruption from Hurricane Irma,” said Anthony Crocco, Regional Director of Metrostudy’s Orlando market. “We expect a strong 4th quarter for closings. Builders are working out of sales backlogs in many projects in Orlando. New home base prices are increasing at most projects in the market although growth is flatter in the emerging areas. Resale pricing growth has been strong while inventory continues to decline, which are good signs for the market.”

The chart below shows the price distribution of annual housing starts in the Orlando CBSA through the third quarter of this year compared to the three previous years.

Screen Shot 2017-11-27 at 11.19.18 AM

While employment remains an important driver of housing demand in Orlando and there was a short term interruption of employment for some residents of Central Florida due to storms, there was little impact on the demand for housing in the region. The Orlando area’s housing market continues to demonstrate strong demand and limited supply. This is true for new and resale housing, and extends outside the core Orlando area to most of the Central Florida region.

Total single-family inventory, which is comprised of units under construction, finished vacant units and models, equaled 8,361 units at the end of the third quarter, 7.6 months of supply. Housing inventory increased by 5.7% compared to last year. This quarter 3,320 lots were delivered to the Orlando CBSA versus 2,870 lots in the same quarter a year ago. Vacant developed lot inventory stands at 23,931 lots, a decrease of 8.6% compared to 26,186 lots last year. Based upon the annual starts rate, this lot inventory represents 21.1 months of supply, a decrease of 4.3 months from last year.

While there has been an increase in the housing inventory levels, the relative inventory (Months of Supply) has been about the same for over two years. Finished vacant housing inventory levels are also the same as they have been for 2+ years therefore the increase in inventory has been in under construction units. The annual closing rate has increased over 50% in that period which is another very good sign for the market. Vacant lot inventories have declined the last few quarters as starts have been above the rate of lot deliveries. Add this to the increasing annual starts rate and the finished lot inventory ratio has declined from 25+ months of lot supply to 21 months over the past year. The pace of new lot development has slowed some in Orlando although most builders remain in search of lot replacements for 2018, and all are actively searching for 2019 delivery lots.

The following table identifies the top ten communities as defined by annual construction starts. Community Annual Starts

The Villages (Lake) ………………………….. 785

Tapestry DRI (Osceola) …………………….. 394

ChampionsGate (Osceola) …………………. 369

Summerlake (Orange) ……………………… 366

Lake Nona DRI (Orange) …………………… 305

Orchard Hills (Orange) ……………………… 278

Hamlin (Orange) ……………………………… 272

Storey Lake (Osceola) ………………………. 265

Reunion Resort & Club (Osceola) ……….. 229

Waterleigh (Orange) ………………………… 188

For information contact:
Anthony Crocco
acrocco@metrostudy.com

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing and related industries nationwide. Metrostudy provides research, data, analytics and consulting services to help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day. For more information, visit www.metrostudy.com

About Hanley Wood

Hanley Wood 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; high-profile executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.

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