If Tampa Bay area existing home sales are in a trough, local new home construction has plunged into the Grand Canyon.

Builders started just 1,155 homes in the 3rd quarter that ended September 30. That's 81 percent down from the peak of 6,162 building starts in the first quarter of 2006.

It's no wonder that more than a half dozen local builders have closed up shop or declared bankruptcy.

"1155 is an incredibly thin number for starts. There’s not a whole lot of room left between 1,155 and zero,’’ said Tony Polito, whose consulting firm Metrostudy released the new home statistics on Thursday.

All is not lost: Polito predicts starts could improve next year, if only because they're so low right now. He bases his view on the theory that the government will succeed in urging banks to issue more mortgages, that lower gas prices will stimulate consumer confidence and that a new administration in Washington will usher in a fresh start.

Even if sales improves, the Tampa Bay area is strapped with too many vacant developed lots. Inventory totaled 31,451 in Pinellas, Pasco, Hillsborough, Hernando and Citrus counties. That's an increase of 2.2 percent from the 30,777 lots at the end of 3rd quarter 2007.

Based on the current home starts pace, that's enough ready-to-build lots to last 72.9-months.  Polito said a balanced market keeps an 18- to 24-month lot supply on hand.

Here's a link to the full Metrostudy press release: Download metrostudy3rdQ08.doc