WHEN YOU'VE GOT MILES OF oceanfront, plenty of build-able land, and healthy employment growth, chances are good that the housing market has the wind at its back. “People come here as tourists, look around, and say, ‘This is a nice place,' ” says Susan Darden, executive officer of the Volusia (Fla.) HBA, which serves the Daytona Beach-Deltona metro area in Central Florida.
With arguably the biggest NASCAR spectacle on the racing schedule and the home course for the Ladies Professional Golf Association, not to mention beach tourists and would-be retirees from the North checking out their options, the area gets more than its share of attention. “There's a high exposure to the area,” says Ron Achille, Florida division president of Melbourne, Fla.–based Holiday Builders, the largest builder in the market, estimating that up to 8 million people travel through the market every year.
Holiday and the rest of the area's top five builders make up more than a quarter of the market's starts; the top 10 is inching toward 40 percent. But it's still a developer's market. “Eighty-five percent of our homes are scattered-lot,” says Achille. “We're buying land to develop our own projects, but there's still a lot of scattered lots available.”
That said, he and Darden admit that land costs are rising, due in part to an influx of new builders trying to catch the wave and new regulatory fees to pay for growth. Achille also bemoans longer approval times and rising prices, which has pushed Holiday Builders from the first-time buyer realm to repeat buyers, move-ups, and some retirees. “We'll continue to follow the prices and get more of them as a result,” he says. Marketwide, affordability (in terms of homes sold to those earning the national median income or less) has suffered, falling to 30 percent this year.
Balancing these issues, at least in the short term, is a push in the multifamily sector—most notably a 740-permit, 437 percent spike in the first quarter of 2004. And area builders still enjoy a demand-supply ratio in their favor, growth in single-family starts, and more jobs. “Daytona has and will continue to be a strong market for us,” says Achille.
†SOURCE: NAHB/WELLS FARGO HOUSING OPPORTUNITY INDEX