October 04, 2019

Home starts rebound in Sarasota-Manatee region

By: Vicki Parsons - IT

By John Hielscher
Staff Writer

Posted Sep 17, 2019

Builders broke ground on 1,706 single-family homes during the April-June period in Sarasota, Manatee and Charlotte counties.

New home starts rebounded during the second quarter in Southwest Florida after a slow start to 2019.

Builders broke ground on 1,706 local single-family homes during the April-June period, a 28% increase from the first quarter, according to a report Tuesday from data supplier Metrostudy.

But home starts were flat compared with second-quarter 2018 throughout Sarasota, Manatee and Charlotte counties. And the annual starts rate was even with the previous quarter and up just 5% for the year, Metrostudy said.

The annual starts pace has been the same for the past nine months, a level of activity driven by baby boomer demand that is the highest since late 2006. The current starts pace is 130% of the 18-year average, but at only two-thirds of the peak in third-quarter 2005.

“The Sarasota/Bradenton housing market is a model of stability, with no significant gains or losses in the housing metrics that Metrostudy tracks,” said regional director David Cobb. “The current economic cycle is at or near peak, and home prices are back to historic highs, so these two trends will shape the housing market in the future.

“The good news is that supply remains constrained, both with new and resale inventory, so we won’t see the oversupply scenario that occurred during the last recession. Short-term worries include the health of the economy and the risk of inflation, but the long-term concern is the crushing amount of national debt that shows no sign of abating,” he said.

Meanwhile, buyers closed on 1,701 new single-family homes, a gain of 24% from the prior quarter but a mere 2% gain over the year. The annual closings rate of 6,057 units was flat from the first quarter but 11% ahead of last year.

The gains in the annual starts pace came primarily among homes priced between $200,000 and $600,000. Starts for homes priced above $600,000 were flat over the year and even down at the $1 million-plus level.

“Demand for affordable homes, those under $400,000, remains robust, while demand for expensive homes is somewhat soft,” Cobb said.

The inventory of finished new homes remains low, at 1.2 months in Sarasota, 1.1 months in Manatee and a half-month in Charlotte.

Lakewood Ranch led the region with 1,169 annual home starts in the second quarter. The West Villages was second at 772, followed by Palmer Ranch at 308, Babcock Ranch at 295 and South Gulf Cove at 176.

Lakewood Ranch and West Villages ranked second and third nationwide for new home sales at midyear among master-planned communities in an earlier scorecard from real estate consultant RCLCO.

“With room left to grow, these two Sarasota area communities may ultimately be in competition for the No. 1 spot in the near future,” RCLCO said.

Manatee County reported 733 new home starts in the second quarter, up 21% from the first quarter but down 6% over the year, Metrostudy said. Sarasota County posted 659 starts, 20% ahead of the previous three-month period and a 9% annual gain. Starts in Charlotte County increased 76% to 314 for the quarter and 28% over the year.