Metrostudy’s survey of the Sarasota-Bradenton housing market showed 1,032 single-family units were started in the third-quarter of 2014, an increase of 20.4 percent over 3Q13. It marked the third time in the last four quarters that quarterly starts were over 1,000 units. The annual start rate compared to last year increased by 15.1 percent, to 3,975 annual starts. Single-family quarterly closings totaled 821 units, which was 5.8 percent higher than 3Q13. The annual closings rate was 3,585 units per year, which was 18.1 percent above the annual closings rate the same quarter last year.

“For the twelve months ending September 30, 2014, new-home starts in price ranges under $250k totaled 1,349 units, down 26.5 percent from the 3Q2013 annual activity,” said Tony Polito, regional director of Metrostudy’s Sarasota market. “Annual new homes starts in prices over $250k were up 62.2 percent for the twelve months ending September 30, 2014 versus 3Q13. The marginal 521 unit increase in the annual start pace was split: 486 less units under $250k and 1,007 additional units above $250k. 193 percent of the growth came in price points above $250k.”

Inventories increased by 21.7 percent compared to the same quarter last year.  Compared to last year, under construction inventory rose by 316 units to 1,638. Finished vacant inventory increased by 11.3 percent from 302 units last year to 336 this year.  However, the number of move-ins exceeded completions during the quarter and FV inventory decreased by 45 units.  Model home inventory was up 40 units from last year at 212 total models. The increased model count is a clear sign of builder confidence.

This quarter 347 lots were delivered to the Sarasota- Bradenton market. Vacant developed lot inventory stands at 37,380 lots, a decrease of 1.9 percent compared to 38,098 lots last year. Based upon the annual start rate, this level of lot inventory represents a 112.8 months supply, a decrease of 20 months compared to last year. At the end of 3Q14, Manatee County had a 26.3 months supply, down from a 27.5 months supply of VDL in 3Q13. Sarasota County had a 30.0 month supply at 3Q14, down from 41.4 months supply at 3Q2013. Housing activity increased in all three Counties, thereby reducing VDL months of supply.

“The double digit growth of 2012 and 2013 has moderated in 2014 and we suspect that housing starts growth will come in under 10 percent by year end,” said Polito.  “National economic worries have keep interest rates low during the quarter which is a positive for demand. However, a large percent of housing demand comes from retirees and empty nesters, which are less interest rate sensitive. A review of deed records indicates that pricing remains up. The overall market saw a 19.5 percent increase in prices versus mid-2013. However, over the last 90 days prices are up just 2.5 percent. Compared to last year, the average home is 13 percent larger at 2,267 SF and the price per square foot is up 5.6 percent to $130/SF. The winter forecast for much of the country is for temperatures colder than average, which is good for Florida builders.”

The final significant trend worth noting is new housing inventory. We consider FV equilibrium as between 1.5 and 2.0 months. The supply of finished vacant housing units has been dropping since 4Q2006. As of September 30, 2014, the months of supply of FV units for all of Sarasota/Bradenton stood at 1.1 months. We did see a 2Q increase in the number of units (up from 318 to 381) and the MOS (up to 1.3 months). That increase was erased in 3Q leaving a low supply going into “season.” The County by County finished vacant supply indicates that Manatee County is below equilibrium level of FV supply at 1.3 months. Sarasota County is even further below equilibrium level at 0.8 months. Charlotte County is now below equilibrium with a 1.2 month supply. The UC months of supply are up to 5.5 months from 4.5 months in 1Q13. This should bring us some needed FV units by December, just in time for “snowbird season”.

The top three market areas based on annual starts are shown below.

Market Area                   Ann Starts (% Chg.)

Manatee ................................... 2,119 (+2.8%)

Sarasota ................................. 1,450 (+29.7%)

Charlotte ................................... 389 (+41.5%)

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

Community (Area)                              Ann Starts

Lakewood Ranch........................................514

The West Villages..................................... 266

South Gulf Cove.........................................173

Palmer Ranch............................................167

Grand Palm...............................................155

Esplanade By Siesta Key ..........................130

Heritage Harbour .......................................126

Harrison Ranch...........................................94

Greyhawk Landing ......................................87

Copperstone................................................66 

During 3Q14, Manatee County recorded 570 housing starts, down 2.2 percent versus 583 starts in 3Q13. Sarasota County recorded 347 housing starts in 3Q14 compared to 252 starts in 3Q2013, a 37.7 percent increase, as the West Villages, Palmer Ranch and Esplande by Siesta Key all saw new starts activity double.

Contributed by Metrostudy.