Tampa Housing 2Q14 Survey: Changing Price Distribution is Key

August 2014: Metrostudy today released the results of its 2Q14 survey of the Tampa Bay housing market, which showed that the “pause” that began last Fall is showing some signs of abating as 2Q14 starts were up 31.8% over 1Q14. During 2Q, 1,529 single-family units were started, which was down 17.4% from the 2Q13 level of 1,851 starts (the best post-recession quarter). The annual starts rate, compared to last year, decreased by 6.1%, to 5,850 annual starts.

Single-family quarterly closings totaled 1,396 units, up 5.1% from 2Q13 levels. The annual closings rate was 6,458 units, 23.8% above the rate for the twelve months ending 2Q13.  A review of deed records indicates that the “pause” had more effect on volume than pricing. The price increases pushed thru in early 2013 have held and now builders must face the question of volume versus price.

“As in the rest of the state, the Tampa Bay region is showing a precipitous drop in construction of units for first time and lower income homebuyers, as the number of annual starts under $150k has declined 57% since 2Q13,” said Tony Polito, Regional Director of Metrostudy’s Tampa Market.  “Builders are instead concentrating on higher-priced inventory, which is booming.  Annual starts of units priced over $450k more than doubled since 2Q13, and we expect to see this trend continue.”

Annual Starts by Price Range

tony 2q

For the twelve months ending June 2014, annual new home starts in price ranges under $200k totaled 1,436 units, down 37.5% from the 2Q13 annual activity in that range. New home starts in prices over $200k were up 12.3% for 2Q14 versus 2Q13. The marginal 379 unit decrease in the annual start pace was split: 861 less units under $200k and 482 more units above $200k (127.2% of the marginal growth).

Total single-family inventory, composed of units under construction, finished vacant and models equaled 3,494 units on the ground at the end of the 2Q14; a 6.5-month supply. Inventories fell by 14.8% compared to 2Q13. Compared to last year, the number of units under construction fell by 348 homes to 1,862 homes. Finished vacant inventory decreased by 17.8% from last year to 1,335. The number of move-ins exceeded completions during the quarter and FV inventory decrease by 183 units versus 1Q14. The FV MOS of single family units fell from 2.1 as of 1Q14 to 1.8 months as of 2Q14.

Hillsborough County remained the most active county within the Tampa market during the second quarter. However, market share declined from 65.1% for 1Q14 to 63.3% for 2Q14, in spite of quarterly starts rising from 738 in 1Q14 to 929 in 2Q14. Market share in Pasco fell from 24.8% for 1Q14 to 24.4% for 2Q14 despite quarterly starts rising from 284 in 1Q14 to 379 for 2Q14. The VDL supply throughout all of Hillsborough County stood at 25.3 months. The VDL supply in Pasco stood at 52.2 months as of June 30, 2014. These two major counties accounted for 87.7% of all annual start activity in Tampa Bay.

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

FishHawk Ranch……………………………………….209

Valencia Lakes………………………………………….159

Hawks Point…………………………………………….146

Lake Brandon…………………………………………..146

River Bend………………………………………………142

Citrus Hills……………………………………………….126

Seven Oaks……………………………………………..126

Magnolia Park…………………………………………..124

The Estuary……………………………………………..123

Trinity……………………………………………………..121

This quarter, 1,949 lots were delivered to the Tampa market. This same quarter a year ago, we delivered 2,447 lots. Vacant developed lot inventory stands at 28,785 lots, an increase of 0.4% compared to 28,801 lots last year. Based upon the annual start rate, this level of lot inventory represents a 59.3 month supply, an increase of 3.8 months compared to last year.

“The major factors going forward will continue to be consumer confidence and general continued improvement in the national economy and the job market,” said Polito. “With an upward trend in wage growth during the second quarter; job creation will be the most important in determining future housing demand in the Tampa market.”

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 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; marquee trade shows and executive events; and strategic marketing solutions. To learn more, visit hanleywood.com.