The new-home market in the Orlando MSA, which includes Orange, Lake, Osceola and Seminole counties, rebounded in the third quarter of 2009, said Anthony Crocco, director of Metrostudy’s North and Central Florida divisions. Builders started about 20 percent more homes than in each of the previous three quarters.
According to Metrostudy’s most recent survey of the Orlando MSA market, there were 1,108 housing starts in the third quarter of 2009, a decline of 12.7 percent compared to last year’s third-quarter rate of 1,269 units. Yet third quarter starts showed an increase of more than 200 units, compared to just fewer than 900 units during the previous three quarters. Orange and Seminole counties are showing the greatest activity in the Central Florida region, Crocco said.
Single-family quarterly closings during the third quarter of 2009 totaled 1,209 units, 37.4 percent lower than last year’s third-quarter rate of 1,931 units.
During the third quarter of 2009, the annual closings rate was 5,727 units, 41.7 percent lower than the annual closings rate of 9,818 units recorded at the end of the third quarter of 2008. Metrostudy’s closings figures represent move-ins evidenced by actual signs of occupancy, said Crocco, who noted that move-ins statistics are a true barometer of demand, as opposed to deed recordings or contract sales, both of which can be artificially inflated by speculative purchases.
“Even though pricing reductions during the past few years have attracted active-adult and move-up buyers, financing is still very hard to come by for all but the most creditworthy,” Crocco said.
The $150,000 to $200,000 price segment had the largest number of annual starts and closings at the end of the third quarter, with 1,281 annual starts and 1,529 annual closings. The $200,000 to $250,000 price segment followed with 959 annual starts and 1,491 annual closings.
Crocco said that during the past year, approximately 44 percent of all new single-family housing was base-priced below $200,000, compared with 22 percent for the year ending in the third quarter of 2008.
“The housing market is stabilizing, as new-home inventories become tighter and resale-home inventories decline,” Crocco said. “Unfortunately, distressed housing is still working into the market, and we expect at least another few quarters of high-volume short-sale and foreclosure activity.” Short sales are sales of homes for which the lender accepts less than the existing mortgage.
Single-family inventory, which is composed of units under construction, finished vacant units and model homes, declined 32.2 percent from September 2008, to 4,365 units in September 2009, a 9.1-month supply. Finished vacant inventory decreased by more than 1,000 units, from 3,515 units in the third quarter of 2008 to 2,429 units this year.
Metrostudy uses finished vacant inventory as a fundamental indicator to monitor the health of housing markets. Finished vacant housing inventory has declined, especially in Orange and Seminole counties.
A lack of job formations continues to plague the Orlando area. In the Orlando MSA, 51,900 jobs were lost in the 12 months ending in August 2009, a 4.8 percent rate of job loss. Unemployment continued to grow in the MSA, reaching 11.5 percent at the end of the third quarter. While unemployment may be nearing its peak, a quick rebound in job formations is not forecast.
“It is possible that the economy of Central Florida will recover a bit sooner than much of the rest of the state, as travel and tourism industries may rehire this winter and spring. But a real recovery will bring jobs across industries, and that is likely a year or more away for most of the state,” Crocco said.
For information contact:
anthony crocco @ 407.875.9090, ext. 820 or 407.694.8855
e-mail [email protected]
tania oshman @ 713.523.6630 or 713.824.2282
tania oshman public relations
e-mail [email protected]
