Demand readings from Metrostudy regional directors show that markets were still bouncing back from the winter in April, although demand for new homes has increased substantially more than new lot demand, in comparison to three-month composite scores from January, February, and March.
New lot demand stayed flat in the majority of Metrostudy's 36 markets in April, with four markets sliding down the scale, and only six markets moving up. Most notable is the Phoenix-Tucson market, which finally reached the mid-point with a 5 in April, after resting at a 3 for the past three months. Regional director Rachel Cantor says builders have to move to secure lots for 2017 in the second quarter, unless they plan to buy finished lots (which hasn't been the case historically).
The amount of vacant developed lots has increased 7% year-over-year in the market, "so we're still delivering more lots than we are absorbing," Cantor notes.
New-home demand scores are more interesting, with 16 markets improving in April from their three-month composite score, and three markets moving down the scale. Many directors report that builders are trying to attract more buyers by targeting certain demographics, building different product types, or better focusing their marketing efforts.
Builders primarily have relied on move-up buyers for the past two years to maintain their rate of closings and accommodate the high cost of land, labor, or materials, but it's clear they need to explore new possibilities to attract buyers with different social and monetary constraints to maintain growth going forward.
A resting birth rate of 4 million annually from 1954–64 presupposes that there will be an influx of baby boomers to the housing market in coming years, primarily in warmer climates.
In Albuquerque, Del Webb's Mirehaven is an age-targeted community that is a more scaled-down version of its previous highly amenitized offerings. Regional director John Covert is surprised that most of the interested buyers are not Albuquerque transplants. "Early success is tied to locals rather than relocation buyers typical for Del Webb communities."
Tony Polito, regional director of Florida's Sarasota-Bradenton market, is seeing product for retirees that deviates from the norm. The traditional retiree home was a two- or three-bedroom/two-bath. "We're now seeing a fourth bedroom that can serve as flex space," he says.