Tampa Bay housing starts still can't break 1,000

In judging the relative health of the Tampa Bay housing market, we're reaching the point where we're out-performing the nation.

We're still hurting, mind you, but we're hurting less than the rest of the country. The latest confirmation came from new home construction numbers for the 2nd quarter.

Local builders started construction on 915 homes from April 1 to June 30. That's a pretty nasty number when you consider the housing start peak was 4,659 in the 2nd quarter of 2006.

A year earlier, in the 2nd quarter of 2008, Tampa Bay housing starts came in at 1,312. That's an annual decline of 30 percent. National housing starts plunged 46 percent year to year.

In terms of the new home market, it looks as if we hit bottom in the 1st quarter of this year, when housing starts plummeted to 708.

Does that mean we're in recovery? Probably not. To quote Tony Polito, who keeps statistics for the firm Metrostudy, the surest sign of a rebound is when new home starts exceed new home closings.

Right now, closings, at 1,100 in the 2nd quarter, maintain their lead over starts. That suggests stagnant demand for housing. You'd expect starts, evidenced by the pouring of a concrete slab, to shoot up if home buyers were rushing back into the market. 

Comments

[Frank Lee]

What were the new market stats in the "normal" pre-Boom era? (1997-2003)

[Jose]

I still say that when you get to a point where you can buy a house for half or less of what it cost to build, not to mention the land on which it sits, you can't fall much lower.

[Fuzzy Bear]

"What were the new market stats in the "normal" pre-Boom era? (1997-2003)"

You need to be more specific as the boom also included the years 2000 through 2006. In addition, the year 2001 was a recession year and would not be considered "normal".

[Frank Lee]

I don't think so. There were plenty of prognosticators using the term "normal" (in the context of *housing* specifically - not the entire market) during most of the months within those years.

The question remains: What were the "normal" building figures during those years? Heck, use a 3 month moving average if you feel the need. We just need some perspective on "normal" with the above article - no benchmarks were given other than comparing to a most obvious outlier (peak 2006).

[Fuzzy Bear]

"I don't think so. There were plenty of prognosticators using the term "normal" (in the context of *housing* specifically - not the entire market) during most of the months within those years."

Lets put it in perspective. The year 2000 was the dot com bust that had a severe impact on the economy. In 2001, specifically 9/11 and the months thereafter created a significant downturn from an economic standpoint well into 2002. During both of these periods there were significant changes in the laws and policies that helped fuel the increase in home values.

In January 2003, then President Bush during his state of the union address talked about affordable housing for everyone. The foundation for the housing bubble had been laid in the years prior to the 2003 state of the union speech.

The losses from the dot com bust and 9/11 had a severe impact on the consumer and the consumer was not purchasing much until the historic low interest rates began shortly after 2001.

Those events impacted nearly every vertical market except healthcare and that is why that period was not "normal" in the context of the housing market. The low interest rates did begin to spark growth in the housing sector and refinancing of mortgages, but closer to 2003.

[Frank Lee]

What were the local new housing stats during 1997-2003?

[Jim Deitch]

Housing starts were at about 18,000 units annually from 1997-2000. By 2003 that had dropped off by about 13% and then took a sharp increase over the next 24 months. January of '03 it was down to 11,000 permits and ticked up to 13,000 by June. By June '04 it was back up to 18,000 and then started dropping in Decemember of that same year.

Jim Deitch
Chief Operating Officer
Southern Crafted Homes

[Frank Lee]

Mr. Deitch,

Thanks for the response and the stats. The only verifications needed with their regard are of the source and area. Are your stats via the same Metrostudy provider? Same coverage area?

Thorner wrote 4,659 (Q2) was a *peak* of the housing boom in 2006. Even if that peak quarter were matched the entire year, it amounts to just over 18,000 units...about the same as you wrote for the annual average from 1997-2000. Is this accurate?

[Jim Deitch]

Good morning Frank,

I try to triple source everything I look at. We subscribe to Metrostudy and Rose Residential Reports. Omni Financial is also a good source. But for closings we also random check samples against the property appraisers office. There is some disparity between sources which is to be expected but they all were sufficiently close to each other.

Regards,

Jim Deitch
Chief Operating Officer
Southern Crafted Homes