Metrostudy’s 3Q14 survey of the Naples/Ft. Myers housing market showed the market experienced its thirteenth consecutive quarter of growth in the annual starts pace. The annual starts rate increased 10 percent, to 3,952 over the previous quarter, and is up 25 percent from the third-quarter of 2013. The quarterly starts rate in Naples/Ft. Myers rose 20 percent to 1,250 over the previous quarter, and was up 40 percent when compared to the third-quarter of 2013.

The annual closing rate was up 13 percent from a year ago, which extends this upward trend to ten consecutive quarters. Both Lee and Collier’s F/V supply ticked up last quarter, at 1.7 and 2.7 months of supply (MOS) respectively. The previous quarter’s F/V MOS was 0.9 for Lee and 2.0 for Collier. Vacant, developed lot (VDL) inventory declined by 2 percent over the previous quarter to 11,482 lots. However, lot deliveries were up by 80 percent year over year, to 1,017 in the current quarter. This marks the third consecutive quarter where lot deliveries topped 1,000 units, and is slightly above the quarterly start pace during this period.

“As in other parts of the state, we are seeing the highest rates of growth for starts in the $300-399k price range, which are up 25 percent since 3Q13,” said David Cobb, director of Metrostudy’s Naples/Fort Myers region. “Starts under $150k are practically non-existent, which is putting a squeeze on the first-time or entry level buyer. We are seeing consistent strength in the higher price ranges.“

Listed below are the top 10 communities in the Naples/Ft. Myers market, ranked by annual starts:

Rank Community Starts Move-Ins

1) Riverstone (Collier) 229 172
2) Ave Maria (Collier) 215 118
3) Preserve at Corkscrew (Lee) 198 171
4) Pelican Preserve (Lee) 155 137
5) Plantation (Lee) 154 141
6) Moody River Estates (Lee) 131 93
7) VillageWalk of Bonita (Lee) 130 132
8) VeronaWalk (Collier) 129 115

9) Lely Resort (Collier) 121 64
10) Reflection Isles (Lee) 102 102

As before, GL Homes, Pulte/DiVosta/Del Webb, and WCI are the market leaders in Southwest Florida this quarter. Riverstone by GL Homes continues as the current starts leader. Multi-builder Ave Maria moves up the list to second place, and WCI’s active-adult Pelican Preserve remains a top five contender. Pulte/DiVosta/Del Webb’s Ave Maria, Plantation, VillageWalk and VeronaWalk continue with their sales successes. Moody River by DR Horton, Lely Resort by Stock Development, and Reflection Isles by Lennar round out the top 10.

Separated by County:

Lee County: Quarterly starts were up 20 percent and quarterly closings were down 6 percent from the previous quarter. The annual starts rate is up 23 percent and annual closings are up 15 percent from one year ago. Housing Inventory remains below equilibrium in Lee County at eight months of supply. Nine months of supply (MOS) is considered normal. The supply of VDL inventory declined 2.7 percent quarter-over-quarter to 6,829, which is 39 months of supply. There were 461 lot deliveries in the quarter. Future lot inventory ticked up 1 percent in 3Q14, at 49,229.

Collier County:
Quarterly starts rose 20 percent, while quarterly closings dropped 20 percent from the previous quarter. The annual starts rate is up 28 percent, and annual closings are up 11 percent from a year ago. The annual starts rate has risen for twenty-one consecutive quarters, from a low of 399 in early 2009, to 1,860 in the current quarter. Housing Inventory has climbed above equilibrium at twelve MOS. A portion of this is due to labor constraints in the market, which is increasing construction cycle times. VDL inventory rose 1 percent quarter-over-quarter to 4,577, a 29 month supply. Lot deliveries remained robust at 556 for the quarter, while future lot inventory declined 2% this quarter, to 23,277. While starts growth is expected to continue in a positive direction, we now see new home prices beginning to match what they were in 2004, just before the housing market meltdown. It’s likely that price appreciation will trend to a more modest level, perhaps at the typical average of 3 percent per year.