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New home building picks up in the Tampa Bay area

Tampa Bay home builders are pouring more concrete than they have for a year, suggesting the worst of the housing slump is behind them.

Local builders started 1,040 homes in the third quarter, which ran from July 1 to Sept. 30. It's the first time in a year that quarterly home starts cracked 1,000.

New home construction peaked at 4,659 in the spring of 2006. By the start of this year, on the heels of last fall's financial meltdown, housing starts had plunged to 697.

Barring a cataclysm, it looks as though that wintertime low represents the housing market bottom, said Tampa real estate consultant Tony Polito, whose firm, Metrostudy, compiled the latest housing figures.

What the market needs now is job creation, on the theory that a certain percentage of freshly hired employees will demand a new home in which to live. But hiring has been stodgy to say the least. In the summer, Tampa Bay's unemployment rate climbed above 11 percent.

"The recovery will stretch out a little longer," Polito said. "Hopefully, the same time next year the job market will improve."

Saws and hammers are more active in the suburban communities where K. Hovnanian Homes operates. The builder reported year-over-year sales surges of 40 to 50 percent in places like Lakeshore Ranch in central Pasco County and South Fork in southeast Hillsborough County.

George Schulmeyer, Hovnanian's West Florida division president, praised the $8,000 first-time home buyer tax credit for stimulating sales though the summer.

"That kicked in a lot of starts," Schulmeyer said. "We put some speculative inventory out there and it sold quickly."

The increase in housing starts helped the Florida construction industry add an estimated 5,500 jobs in August. That halted two years of layoffs that had thrown 200,000 construction employees out of work.

Sales of new homes in the Tampa Bay area aren't as positive. But they're certainly less bad.

New home closings — when buyers actually move into homes — edged down in the third quarter. That dip was caused by the record low number of starts that entered the building pipeline last winter.

Buyers closed on 1,033 new homes in the three months ending Sept. 30, compared with 1,105 homes in the second quarter ending June 30.

A glut of unsold new homes continues to oppress the market, but it is slowly reversing. Vacant new homes in the region stood at 2,079 on Sept. 30. The same time a year ago, the surplus was 2,838.

The same can't be said for vacant building lots, which in Tampa Bay alone number 31,308, enough to last about eight years at current sales. Polito said lot inventory has crept upward as builders bring new subdivisions on line.

Schulmeyer, whose homes sell for about $200,000 on average, predicted price stagnation into next year. Credit is tighter, and foreclosure homes remain a competitive threat.

"There are not many banks doing wild and creepy loans anymore," he said. "It's credit-driven these days. You have good credit, you get the mortgage."

Tampa Bay housing starts declined 17 percent year over year, but builders put in their best performance since the summer of 2008:

3rd quarter 2009: 1,040

2nd quarter 2009: 916

1st quarter 2009: 697

4th quarter 2008: 927

3rd quarter 2008: 1,255

SOURCE: Metrostudy

Housing starts

Tampa Bay housing starts declined 17 percent year over year, but builders put in their best performance since the summer of 2008:

Third quarter 2009: 1,040

Second quarter 2009: 916

First quarter 2009: 697

Fourth quarter 2008: 927

Third quarter 2008: 1,255

Source: Metrostudy

New home building picks up in the Tampa Bay area 10/13/09 [Last modified: Tuesday, October 13, 2009 10:11pm]
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