TAMPA HOUSING 2Q17: Best Quarterly Starts & Closings Since Recession; Continued Growth Expected Over Next Few Years

  • Quarterly New Home Starts Up 36.2% YoY – the best quarterly starts rate since 4Q06
  • Quarterly Closing Rate Up 32.1% YoY – the best quarterly move-in rate since 3Q07
  • New home prices continued to trend upward, with home starts in prices over $200K up 23.5% over 2Q16.

Metrostudy’s 2Q17 survey of the Tampa housing market shows that 2,918 single-family units were started in the quarter, a 36.2% increase from last year’s rate. Annual starts of 9,851 units ending 2Q17 increased by 17.6% YoY.  Single-family quarterly closings totaled 2,491 units, 32.1% higher than 2Q16. The annual closings rate of 9,498 units was 29.7% above the annual closings rate for the twelve months ended 2Q16.

“The second quarter was Tampa’s single best quarter for starts since 4Q 2006 and the best quarter for closings since 3Q 2007,” said Tony Polito, Regional Director of Metrostudy’s Tampa market. “Tampa is now building at 99% of the twenty-year moving average of 9,958 annual starts. Metrostudy is still anticipating that there will continue to be growth in starts and closings in the Tampa market over the next few years.”

For the twelve months ending June 2017, annual new home starts in price ranges under $200K totaled 1,766 units, down 3.6% from 2Q16. New home starts in prices over $200K totaled 8,085 units, up 23.5% from 2Q16.

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Total single-family inventory, which is composed of units under construction, finished vacant and models equaled 5,148 units on the ground at the end of 2Q17, a 6.5-month supply and a 7.4% increase from compared to 2Q16. Compared to last year, the number of units under construction rose by 708 homes to 3,690 homes. Finished vacant inventory decreased by 23.9% YoY to 1,039 in 2Q17. The FV months of supply declined from 2.2 months in 2Q16 to 1.3 months in 2Q17. The number of move-ins exceeded completions during the quarter and FV inventory fell by 149 units versus 1Q17 and the MOS fell from 1.6 to 1.3 months during the quarter.

In the second quarter, 2,096 lots were delivered to the Tampa market, down from 3,432 lots the same quarter last year. Vacant developed lot inventory stood at 32,475 lots, a decrease of 2.7% compared to 33,380 lots last year. Based upon the annual start rate, this level of lot inventory represents a 39.6-month supply, down 8.2 months from last year.

Hillsborough County remained the most active county within the Tampa market. Hillsborough County lost market share, down from 61.2% for 2Q16 to 57.8% for 2Q17. Market share in Pasco grew from 27.3% for 2Q16 to 30% for 2Q17. However, over the last 90 days Hillsborough County grew from 54.6 to 57.8% and Pasco fell from 32.4% to 30%. These two major counties accounted for 87.8% of all annual start activity in Tampa.

“A significant trend for Tampa involves new housing inventory,” said Polito. “Finished Vacant units fell by 327 units from a year ago and by 149 units from March. The result was a decrease in the Months of Supply from 2.2 months in June 2016 to 1.3 months in June 2017. The ideal level of supply of FV units is 1.0 to 1.5 months, so this indicator is at equilibrium. The backlog of under construction remains as strong as at any point since 2007 and points to solid closing numbers in 3Q and 4Q 2017. With 3,690 units under construction close attention should be paid to the cancellation rate as this could push FV supply higher. The good news is that long term interest rates should not fluctuate too much the rest of 2017.”

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

Community (Area)                                Annual Starts

Wiregrass……………………………………………..398

Waterset ………………………………………………342

FishHawk Ranch …………………………………..308

Starkey Ranch ………………………………………233

Long Lake Ranch …………………………………..219

Oak Creek (SEH) …………………………………..215

Bexley Ranch…………………………………………155

Connerton …………………………………………….147

Belmont ………………………………………………..144

Valencia Lakes……………………………………….138

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

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