Home builders are investing in the Sunshine State in big ways. From Stanley Martin Homes’ $60 million expansion into Tampa to Mattamy Homes’ $10.1 million purchase in Naples, builders are securing sites to meet Florida’s continued growth.
While most markets have remained relatively strong in the state, some markets are outperforming others, according to the Zonda Market Index which measures each market against historical performance.
Larry Buckner, manager, land advisory at Zonda, says, “In May 2024, Tampa, Sarasota, Jacksonville, Port St. Lucie, and Miami were categorized as 'over performing' relative to their historical averages. However, Tampa, Port St. Lucie, and Miami are the three metros that have been consistently over performing in each monthly release this year, illustrating the strength of these housing markets.”
Big Plans for Builders
In the Tampa Bay area, Stanley Martin’s total of $60 million in contracted land deals secured nearly 1,200 sites, the home builder says.
"This $60 million investment marks a significant milestone for Stanley Martin Homes as we expand our footprint in the greater Tampa market," says Eric Marks, Stanley Martin Homes regional president. "These new land deals represent the beginning of our long-range plan to establish a strong presence in all major markets across the state of Florida."
Over the last six months, Stanley Martin’s land portfolio has grown substantially with its first closings slated in 2025. Stanley Martin plans to pursue additional land opportunities throughout this year and the following to build an pipeline for additional growth.
Rick Harcrow, Stanley Martin Homes division president, adds, “We are excited about the potential these new communities hold for us and the Tampa Bay area. Our team is dedicated to creating exceptional living experiences that meet the diverse needs of home buyers in this dynamic region."
Marking a milestone for Mattamy’s Tampa and Southwest Florida Division, the home builder recently closed on a $10.1 million 65-acre property and is approved for 249 homesites for a new community named Summerlit in Naples.
Near downtown Naples and Marco Island, Summerlit will offer homes ranging in size from 1,397 to 2,810 square feet on 40-foot and 50-foot lots, in addition to coach homes and condominiums.
“Our entire team is excited and looking forward to building beautiful homes and an amazing community at Summerlit for home buyers looking for enhanced choice and a prime location in Naples," says Bob Meyn, president of Mattamy's Tampa and Southwest Florida Division.
Over in South Florida, 13th Floor Homes, a division of Miami-based 13th Floor Investments, purchased 270 acres in Tamarac for $14 million. On the former site of the Woodlands Country Club, the land will be developed into a gated luxury community, The Woodlands, with 335 single-family homes.
Having developed more than 1,100 homes and 3,500 homesites across the region in the last 10 years, 13th Floor Homes also has four additional active housing communities under construction including one single-family community in Fort Lauderdale, a single-story townhome community in Delray Beach, and two multifamily projects in Port St. Lucie.
Farther up the east coast in the Jacksonville area, Century Communities has also announced three new Century Complete communities with more than 120 combined new homesites. "Jacksonville is one of the hottest markets in the nation, so we're excited to continue filling the need for quality and affordable new homes with these three exceptional communities," says Century Communities national president Greg Huff.
Not So Sunny Conditions
Trailing the overwhelming excitement for the state, Buckner says there are key points that have contributed to its success but there are also concerns to watch for. “Given volatility surrounding this year's election cycle and persistent affordability constraints, Florida’s housing market will likely moderate over the next few months. However, it is important to discuss Florida’s housing market relative to other United States markets,” he says.
“Florida’s housing market over the past three years has largely been supported by strong migration, consistently ranking as one of the top states for relocation, for both businesses and consumers. Furthermore, work-from-home trends continue to provide a tailwind to Florida’s inbound migration and nearly 70% of U.S. companies offer work location flexibility.”
For builders, Buckner’s concerns are focused on elevated mortgage rates, consumer confidence, and rising input costs as land and development costs are putting pressure on profit margins.
He adds, “Margins are further constrained due to incentives most builders utilize to drive sales volume, usually through combining mortgage rate buydowns and contributions toward closing costs. These incentives are becoming increasingly necessary to get buyers off the sidelines, as rising prices and mortgage rates have diminished consumer confidence. As long as mortgage rates remain elevated, these incentives will remain, placing pressure on profit margins, and potentially suppressing new housing inventory long term.”
Over the past six months, the state’s market performance was slightly weaker than the prior year with a six-month average new home sales pace of 2.98 sales per month compared to 3.13 sales per month during the same period last year. Buckner says the slowdown has numerous factors including new single-family list prices being up 9% over the past year and a year-over-year surge of as much as 40% to 60% in active resale listings.
“Our June builder sentiment survey revealed that markets are slowing down,” Buckner says. “Nearly 70% of respondents reported that demand was slower than expected. While some of the slowdown can likely be attributed to seasonality, it is worth noting that total new home sales in Florida are down 3% over the past year, and Florida’s new home pending sales index (PSI) is down 3.4% year over year.”
Even though current sales conditions are tight, these home builders' lofty land buys are placing them on track to meet the continued demand for housing across the state.
