NAPLES / FORT MYERS HOUSING 4Q18: Price Appreciation Tapers Off But Starts Continue to Show Annual Strength
- Quarterly starts are up 6.5% over 4Q17 levels – Annual starts are up 12% from 2017 numbers
- Quarterly closings are up 14% from 4Q17 and Annual Closings for 2018 are up 3% over 2017
- Home price appreciation in has tapered off – New home inventory remains constrained, and finished, vacant inventory is low, so we do not anticipate an over-build situation similar to which occurred in 2005-2006
Metrostudy’s 4Q18 survey of new housing activity in the Naples/Ft. Myers market – comprising both Lee and Collier counties – shows that the quarterly starts rate for decreased 10% to 1,189 from the previous quarter, but increased 6.5% when compared to the fourth quarter of 2017. The annual starts pace increased 1.4% over the previous quarter to 5,139, and increased 12% from the fourth quarter of 2017. Our fourth quarter survey observed finished vacant inventory at only 1.2 months of supply (MOS), unchanged from the previous quarter. Note that in 2018, the starts trend was upward, ending a relatively flat period of starts growth which occurred in 2016-2017.
“As with other areas of the U.S., home price appreciation in Naples-Ft. Myers has tapered off,” said David Cobb, Regional Director of Metrostudy’s Naples-Ft. Myers market. “New home floorplans being offered today average 1% less in base sales price than twelve months ago, and resale price appreciation has decreased to 2-3% annual gain, in line with the 50 year historical average. New home inventory remains constrained, and finished, vacant inventory is low, so we do not anticipate an over-build situation similar to which occurred in 2005-2006.”
A county-by-county breakdown of starts and closings is below:
- Lee County: Lee County is comprised of the Ft. Myers-Cape Coral MSA. Quarterly starts decreased 10% to 685, while quarterly closings increased 2% to 781 from the previous quarter. Quarterly starts were down 5% y-o-y, while quarterly closings were up 38% y-o-y. The annual starts rate increased 18% to 3,024, and the annual closings rate increased 24% to 2,953 from the fourth quarter of 2017.
- Collier County: Collier County is comprised of the Naples-Marco Island-Immokalee MSA. Quarterly starts decreased 9% to 504, while quarterly closings increased 2% to 521 from the previous quarter. Quarterly starts increased 28% y-o-y, while quarterly closings decreased 10% y-o-y. The annual starts rate increased 3% to 2,115, while the annual closings rate decreased 8% to 2,165 from the fourth quarter of 2017.
Fourth quarter 2018 closings increased 2% from the previous quarter to 1,302, and increased 14% from the fourth quarter of 2017. The annual closing pace of 5,118 increased 3% from the previous quarter, and rose 8% from the fourth quarter of 2017. Lee’s finished, vacant home (F/V) rate decreased to 1.0 months of supply (MOS) while Collier’s F/V edged upwards to 1.4 MOS. The previous quarter’s F/V MOS was 1.2 for both Lee and Collier. The finished-vacant MOS metric is the number of finished-vacant homes divided by the number of move-ins over the last four quarters, then multiplied by twelve.
The Top 10 single family communities in the Naples/Ft. Myers market, ranked by the past 12 months starts through the fourth quarter of 2018 is shown in the following chart. Ave Maria continues to be the top community, a position it has held for sixteen consecutive quarters. Westbrook and Portico make the Top 10 list for the first time:
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