Boomer Fuel Housing Boom – Paced by relentless retiree demand, housing starts in Southwest Florida have roared to their fastest rate in nearly 10 years.

Construction started on 1,492 single-family units in the region during the second-quarter, a nearly 18 percent gain over the year, according to a new report by data supplier Metrostudy.

That was the best quarter for home starts since third-quarter 2006, said Tony Polito, regional director of Metrostudy’s Sarasota-Bradenton market.

“Growing retiree demand, solid job growth and low interest rates all fueled an impressive quarter for housing activity in Sarasota/Bradenton,” Polito said.

And it’s nothing new this year. In the first-quarter, the region posted 1,443 housing starts, which had been the highest mark since 2006.

The April-June numbers translate to 5,406 annual starts, which tops last year’s rate by almost 33 percent.

Buyers closed on 1,447 new homes in the quarter, the best three-month period since the Great Recession, said Polito, whose report covers Manatee, Sarasota, Charlotte and a small portion of DeSoto counties.

“Retiree demand should continue to drive growth in starts and closings in Sarasota over the next few years,” he said. “Potential road bumps include rising interest rates, affordability issues, public sentiment towards growth, the overall economy and the ability to sell homes up north.”

Sales remain hot

Local builders say sales remain hot, fueled largely by baby boomers who have retired or are making plans to do so in the future.

Neal Communities, the largest locally based home builder, tallied 104 home sales in July, more than in May or June and during what is typically a slower summer month.

“Similar to the national home-buying market, just over half of our buyers this month fall into the over 55 age demographic,” said Michael Storey, president of Neal Communities. “The many amenities we offer, including clubhouses, upgraded home features and fitness facilities, appeal to these buyers. Our specialization in this market segment accounts for our robust sales.”

The Lakewood Ranch-based builder reported 10 sales each in its Grand Palm and Milano communities in Venice, and seven each in Magnolia Point in Sarasota and Windwood in North Venice.

Confidence among builders in the single-family market rose 2 points in the National Association of Home Builders/Wells Fargo Housing Market Index released Monday.

“Builder confidence remains solid in the aftermath of weak GDP reports that were offset by positive job growth in July,” said NAHB chief economist Robert Dietz. “Historically low mortgage rates, increased household formations and a firming labor market will help keep housing on an upward path during the rest of the year.”

In Southwest Florida, starts for new homes priced under $250,000 increased 12.4 percent over the year, while home starts above that price jumped 43 percent, Metrostudy said.

Manatee, Sarasota post big gains

Manatee County reported 661 housing starts in the quarter, 13.6 percent ahead of last year, Metrostudy said.

• Sarasota County recorded 576 starts, a gain of 33.3 percent.
• On an annual basis, Manatee reported 2,626 starts as of June 30, up 19.5 percent, Sarasota showed 1,924 starts, a gain of 43.6 percent, and Charlotte, with 699 starts, climbed 62.6 percent.

The single-family inventory — homes under construction, finished vacant and models — totaled 2,713 units, some 24 percent higher than last year, which is a 6.7-month supply.

The vacant developed lot inventory stood at 37,152, down by 1.7 percent for the year. During the second quarter, 1,346 lots were delivered in the local market, just 10 fewer than 2015.

“We are watching the trend in new housing inventory as supply of finished-vacant housing units continues to drop and, in second-quarter 2016, finished-vacant months of supply for all of Sarasota-Bradenton stood at 0.9 months, well below finished-vacant equilibrium between 1.5 and 2 months,” Polito said.

“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.”

Observer, September 2016