TAMPA HOUSING 3Q16: The Best Single Quarter for New Home Starts since the Great Recession

  • 3Q16 New Home Starts are Up 16.5% over 3Q15 – Annual Rate is Up 27% YoY
  • Townhomes are an increasingly attractive alternative to renting; the starts rate for these units is up 48% YoY
  • The median home price in August 2016 was up by 13.6% to $204,340 – still Short Sales and Bank Sales continue to skew the overall median price downward.

Metrostudy’s 3Q16 survey of the Tampa housing market showed that 2,388 single-family units were started in the quarter, an increase of 16.5% compared to last year’s rate. The annual starts rate, compared to last year, increased by 27.0%, to 8,662 annual starts. Single-family quarterly closings totaled 2,115 units, which was 22.6% higher than the 1,725 closings during the 3rd Quarter of last year. The annual closings rate was 7,687 units. This was 22.4% above the annual closings rate of 6,282 units for the twelve months ended 3Q15.

“The Tampa housing market continues to benefit from good job growth, a falling unemployment rate compared to a year ago, record level employment and low interest rates,” said Tony Polito, Regional Director of Metrostudy’s Tampa market. “The 2,388 units started during 3Q was the best single quarter for starts since the “Great Recession”. That said, Tampa is still only building 87% of its 20 year average. The quarterly closing rate of 2,115 units also represented a new post-recession high. In fact the last time Tampa closed over 2,000 quarterly units was 1Q2008.”

Total single-family inventory, which is composed of units under construction, finished vacant and models equaled 5,038 units on the ground at the end of the 3rd Quarter of 2016; an 7.9-month supply. Inventories grew by 24.0% compared to 3rd Quarter of 2015. Compared to last year, the number of units under construction rose by 850 homes to 3,328 homes. Finished vacant inventory increased by 7.9% from 1,189 units last year to 1,283 this year. Compared to a year ago, the FV months of supply declined from 2.3 to 2.0 months. The number of move-ins exceeded completions during the quarter and FV inventory fell by 82 units versus 2Q16 and the MOS fell from 2.2 to 2.0 months.

This quarter, 2,350 lots were delivered to the Tampa market. This same quarter a year ago, we delivered 2,127 lots. Vacant developed lot inventory stands at 33,791 lots, an increase of 0.7% compared to 33,567 lots last year. Based upon the annual start rate, this level of lot inventory represents a 46.8 month supply, down 17.9 months from last year.

Metrostudy is still anticipating that there will continue to be growth in starts and closings in Tampa over the next few years. This does not mean 2003–2006 levels, but demand should continue to grow. Competition, especially at the low end comes from apartments. Townhomes are an attractive alternative to renting and there was a 48% increase in the annual starts pace for townhomes during 3Q 2016 versus 3Q 2015, up from 979 annual units to 1,451 units.

For the first eight months of 2016, MLS SF sales were up 2.4% from the same period of 2015 with 36,153 sales. The median home price in August 2016 was up by 13.6% to $204,340. However the resale market is three tiered: traditional, short sales and foreclosures. The median sale price for traditional resales was $214,175 in August 2016, up 7.1%. Short Sales and Bank Sales continue to skew the overall median price downward.

The other significant trend involves new housing inventory. Starts and Closings both grew in 3Q 2016 versus 3Q 2015 and 2Q 2016. Finished Vacant units fell by 82 units from a quarter ago. The result was a decrease in the Months of Supply from 2.2 months in June to 2.0 months in September. Only once since the recession has FV supply been below 2.0 months (in 2Q 2014 the supply was 1.9 months). Ideally the supply of FV units would be nearer to 1.5 months. The backlog of under construction remains strong and points to solid closing numbers in 4Q 2016. With 3,328 units under construction, close attention should be paid to cancellation rate as this could push FV supply back above 2.0 months.

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

Community (Area)                                    Ann Starts

Wiregrass …………………………………………….. 328

Waterset ……………………………………………… 287

FishHawk Ranch ……………………………………. 254

Long Lake Ranch …………………………………… 231

Ayersworth Glen ……………………………………. 192

Hawks Point …………………………………………. 189

Valencia Lakes ………………………………………. 185

Oak Creek (SEH) …………………………………… 172

Magnolia Park ……………………………………….. 169

Union Park …………………………………………… 168

For information contact:

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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