TAMPA HOUSING 4Q17: New Home Starts and Closings Strong in 2017; Continued Growth Expected in 2018

  • Quarterly New Home Starts are up 12.4% YoY, while Annual Starts in 2017 were up 18.6% over 2016 levels
  • Quarterly Closings were up 13.1% from 4Q16 levels, while the Annual Closings Rate was up 21.1% YoY.
  • The new housing start level is now 105% of the twenty year moving average, and we expect the market to continue to expand in 2018. Aside from a large scale economic event, the greatest risk to the market is interest rates and affordability.

Metrostudy’s 4Q17 survey of the Tampa new home market shows that 2,504 single-family units were started in the quarter, an increase of 12.4% compared to 4Q16’s rate. The annual starts rate, compared to last year, increased by 18.6%, to 10,542 annual starts. Single-family quarterly closings totaled 2,758 units, up 13.1% from 4Q16 levels. The annual closings rate was 9,886 units, up 21.1% from the closings in 2016.

“We ended 2017 with an 18.6% jump in housing starts and a 21.1% increase in closings,” said Tony Polito, Regional Director of Metrostudy’s Tampa market. “The new housing start level is now 105% of the twenty year moving average. We expect the market to continue to expand in 2018. Aside from a large scale economic event, the greatest risk to the market is interest rates and affordability.”

For the twelve months ending December 2017, annual new home starts in price ranges under $250k totaled 4,719 units, up 8.7% from the 4Q16 numbers. New home starts in prices over $250k grew by 28% YoY to 5,824 units as of 4Q17. The marginal 1,650 unit increase in the annual start pace was split: 376 more units under $250k and 1,274 more units above $250k.

The chart below indicates the current distribution of annual starts by price range:

Screen Shot 2018-02-13 at 8.24.43 AM

The average single-family new home price in Hillsborough and Pasco Counties was $319,936 in 2017. The average price in 2016 was $317,101. New single-family home prices only rose by 0.9% in 2017. Local wage growth was offset by slightly higher interest rates.

This quarter, 1,508 lots were delivered to the Tampa market. This same quarter a year ago, we delivered 1,279 lots. Vacant developed lot inventory stands at 31,621 lots, a decrease of 1.8% compared to 32,190 lots last year. Based upon the annual start rate, this level of lot inventory represents a 36.0 month supply, down 7.4 months from last year. Compared to last year, the number of units under construction rose by 590 homes to 3,835 homes. Finished vacant inventory increased by 6.7% from 1,156 units last year to 1,234 this year. Compared to a year ago, the FV months of supply declined from 1.7 to 1.5 months. The number of completions exceeded move-ins during the quarter and FV inventory grew by 236 units versus 3Q17 and the MOS grew from 1.3 months as of 3Q17.

For the first eleven months of 2017, MLS SF sales were 2.2% higher than the same period of 2016 with 44,243 sales. Sales are limited by supply constraints. The months of supply of MLS listings was just 2.6 months in November. The median home price in November 2017 was up by 10% to $225,500. However the resale market is three tiered: traditional, short sales and foreclosures. The median sale price for traditional resales was $229,000 in November 2017, up 6.5%. Short Sales and Bank Sales continue to skew the overall median price downward.

The other significant trend involves new housing inventory. Irma had little lasting impact on the new home sector in Tampa. The supply of under construction units ballooned from 4.7 months in 2Q to 5.4 months at the end 3Q 2017. The UC months of supply fell back to 4.7 by the end of 4Q 2017. It is likely some closings were pushed into 2018, as finished vacant units grew during 4Q by 236 units. The result was an increase in the Months of Supply from 1.3 months in September 2017 to 1.5 months in December 2017. However, at the end of 2016 the FV months of supply stood at 1.7 months. Metrostudy considers 1.5 to 2.0 months of supply of FV as an equilibrium level

The table below ranks the top ten communities in the market by annual starts.

Community (Area)                                             Ann Starts

  1. Waterset ……………………………………………… 338
  2. Wiregrass ……………………………………………. 315
  3. Starkey Ranch ……………………………………… 290
  4. FishHawk Ranch …………………………………… 255
  5. Bexley ………………………………………………… 243
  6. Long Lake Ranch ………………………………….. 230
  7. Connerton ……………………………………………. 223
  8. Cypress Creek …………………………………….. 193
  9. South Fork …………………………………………… 193
  10. Magnolia Park ………………………………………. 186

Tony Polito
813.888.5151
tpolito@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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