Metrostudy’s 2Q16 survey of the Sarasota-Bradenton housing market shows 1,492 single-family units were started in the quarter, an increase of 17.6% compared to 2Q15. The annual start rate compared to last year increased by 32.6% to 5,406 annual starts. Single-family quarterly closings totaled 1,447 units, 35.1% higher year-over-year. The annual closings rate was 4,875 units per year, 25.7% above the annual closings rate as of 2Q15.
“The quarterly starts pace of 1,492 units bested 1Q16 to become the best quarter for starts since the third quarter of 2006,” said Tony Polito, Regional Director of Metrostudy’s Sarasota/Bradenton market. “The quarterly closing rate of 1,447 units was the market’s the best single quarter for closings since the ‘Great Recession.’ Retiree demand should continue to drive growth in starts and closings in Sarasota over the next few years. Potential road bumps include rising interest rates, affordability issues, public sentiment towards growth, the overall economy and the ability to sell homes ‘up north.’”
For the twelve months ending June 30, 2016, new homes starts in price ranges under $250K totaled 1,544 units, up 12.4% from 2Q15. In 2Q16, annual new homes starts in prices over $250K were up 42.9% YoY. The marginal 1,329-unit increase in the annual start pace was split: 170 more units under $250K and 1,159 more units above $250K.
Annual Starts by Price Range
Manatee, Sarasota, and Charlotte were the top three market areas in 2Q16 based on annual starts. Manatee had 2,626 annual starts and Sarasota had 1,924 annual starts, representing increases of 19.5% and 43.6%, respectively, from the same period last year. With 699 annual starts, Charlotte saw a 62.6% increase from the annual rate of starts as of 2Q15. During 2Q16, Manatee County recorded 661 housing starts, up 13.6% compared to 2Q15. Sarasota County recorded 576 housing starts, up 33.3% compared to 2Q15. In 2Q16, Venice overtook North Manatee as the second most active area on a quarterly basis.
Annual Starts by Submarket
Total single-family inventory – units under construction, finished vacant and models – equaled 2,713 units on the ground at the end of the second quarter, a 6.7-month supply. Inventories increased by 24.3% compared to the same quarter last year. Compared to last year, under construction inventory rose by 485 units to 2,081. Finished vacant inventory increased by 0.3% YoY to 355 units this year. However, the number of completions exceeded move-ins during the quarter and FV inventory increased by 34 units. Model home inventory was up 45 units from last year at 277 total models. The increased model count is a clear sign of builder confidence. Builders in this market are closing 17.6 homes per year, per model, compared to 16.7 last year. By comparison, the market was closing 19 homes per model in 2002 and 25 homes per model at the end of 2005.
Under Construction and Finished Vacant Inventory 2Q10-2Q16
In 2Q16, 1,346 lots were delivered to the Sarasota-Bradenton market compared to 1,356 in 2Q15. Vacant developed lot inventory stood at 37,152 lots, a decrease of 1.7% compared to last year. Based upon the annual start rate, this level of lot inventory represents an 82.5-month supply, a decrease of 29 months compared to last year. Most VDL are in Charlotte County. At the end of 2Q16, Manatee County had a 22-month supply, down from a 23.2-month supply of VDL in 1Q16. Sarasota County had a 24-month supply at 2Q16, down from a 24.4-month supply at 1Q16.
“Growing retiree demand, solid job growth, and low interest rates all fueled an impressive quarter for housing activity in Sarasota/Bradenton,” said Polito. “We are watching the trend in new housing inventory as supply of finished vacant housing units continues to drop and, in 2Q16, FV months of supply for all of Sarasota/Bradenton stood at stood at 0.9 months, well below FV equilibrium between 1.5 and 2 months. All told, the total inventory level of 6.7 months is within equilibrium and Metrostudy believes demographics will support strong ‘snowbird seasons’ for several more years.”
For further analysis of the Sarasota-Bradenton market, contact regional director Tony Polito: firstname.lastname@example.org