March of 2014 was Florida’s 44th consecutive month with positive job growth, and at 6.3%, the state’s unemployment rate remains below the national average of 6.7%. The pace of new home construction in South Florida improved by 16.6% in the first quarter of 2014 with 1,659 housing starts, versus 1,423 in the prior quarter. This level of home building is only 1.3% higher than in the first quarter of 2013, and is 18% off the 2013 peak attained in the second quarter of that year.
On an annual basis, starts remained flat at 6,903 when compared to the previous quarter, but the annual rate is up 19% from the first quarter of 2013. The annual start rate has plateaued at 6,800- 6,900 for the past three quarters. The plateau in starts can be attributed to several factors, including constraints in land availability, labor supply, and the cumulative effect of price increases. How this will play out in 2014 remains to be seen, but it is likely to put upward pressure on prices for the rest of the year.
Highlights by County
Miami-Dade: Miami-Dade once again leads the six county market in annual starts, although the number, 517, is down 12% from 1Q13. Still, that represents a 22% increase from 4Q13, and four of the top ten communities are located in Miami-Dade. Completions declined 34.6% from the previous quarter, when builders pushed to finish homes by the end of the year. Vacant inventory dropped to 1.8 months of supply, down from 3.1 months in 4Q13.
Broward: First-quarter housing starts in Broward County jumped 65% in 4Q13, driven by construction activity in Parkland. Finished, vacant inventory remains very tight at only 1.6 months of supply – making eight consecutive quarters in which this rate remains below 2 months.
Palm Beach: Housing starts in Palm Beach County surged 11.2% from the previous quarter and are up 15.1% YoY. Completions increased by 19% to 560, and the 1,170 homes under construction represent the highest level of activity in over six years. Finished, vacant inventory remains low at 1.3 months of supply, and as with Broward, has been below two months of supply since mid-2012.
Martin: This land-constrained county saw starts drop by 38.7% QoQ, while completions increased by 44%. Finished, vacant months-of-supply increased from 2.6 to 3.7 months.
St. Lucie: St. Lucie’s starts and completion rates have improved substantially from one year ago. The Tradition community continues to lead the county in housing activity.
Indian River: Starts are up 30.3% QoQ, and finished vacant inventory increased slightly to 3.3 months of supply.
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