Construction began on nearly 3,000 homes in the Tampa Bay area in the third quarter of this year but the new-home market shows definite signs of slowing down.
Moreover, "truly affordable housing (is becoming) an impossibility in this market," a new report warns.
According to Metrostudy, which tracks housing starts in the bay area, 2,946 single-family homes came out of the ground in the three months ended in September, 5.1 percent more than in the third quarter of 2017. However, the increase was largely due to a near halt in construction following Hurricane Irma a year ago September.
"A case can be made that the market was slower in the third quarter 2018 than (in the) third quarter 2017," said Tony Polito, regional director of Metrostudy’s Tampa market.
Despite an overall gain this July, August and September, construction starts of homes over $450,000 plunged 6.8 percent compared to the same period a year earlier.
"A telltale sign of a slowing market is contraction starting in the upper end," Polito said.
Buyers looking for new homes in more moderate price ranges will find it increasingly hard as land, lot and labor costs plus government fees drive up builders’ costs. Rising interest rates also are pushing up monthly mortgage payments.
Metrostudy calculates that 11,000 new homes begin construction for every 30,000 new jobs.
If Tampa Bay "can sustain this level of job growth, the biggest road block for new housing will be the cost of housing versus wage growth, especially with another three to four Federal Reserve interest rate increases anticipated in 2019," the Metrostudy report says.
Rates, which had been at historical lows for several years, are now topping 5 percent.
Starkey Ranch, a new-home community on Pasco County’s bustling State Road 54 corridor, had the most construction starts in the third quarter — 384. That was followed by Southfork Lakes in Hillsborough County (358); Epperson (310) and Wiregrass (307), both in Pasco; and Waterset (254), in Hillsborough.
Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate