Follow the fuzzy logic of this one. Speculators are so active, that 30% of new development is vacant. However, because activity HAS been so frenzied, it's only "2.6 months supply". So the question begs, if speculators continue to buy and own vacant houses, and pile up more vacancies, at what point do inventory numbers become meaningless, given that they (speculators buying and owning vacant housing) ARE the activity? "Pent up demand" from who exactly, speculators who love to own mint condition vacant housing, like some collectable? Ludicrious.
Treasure Coast housing surge ebbs
By Linda Rawls
Palm Beach Post Staff Writer
Saturday, July 30, 2005
Nearly 30 percent of new homes in St. Lucie County developments are vacant, a new housing report shows, raising concerns for the first time that one of the nation's hottest housing markets could be cooling down.
Adding to concerns of at least a temporary housing market slowdown is the fact that new-home starts in St. Lucie County County plunged 36 percent in the first half of this year, the report shows.
"There are now 447 finished vacant homes in St. Lucie County," said Bradley Hunter, South Florida division director of Metrostudy, a West Palm Beach-based housing research firm. "We use that as a gauge of inventory that is potentially in the hands of investors. At 27 percent of total inventory, this figure is high enough to begin watching carefully to determine whether investors who purchased homes last year are going to find users to occupy those units."
In neighboring Martin County, where development restrictions are among the toughest in the nation, new-home starts in subdivisions fell 13 percent in the first half of this year, compared with the same period last year.
At the current pace of new-home buying in St. Lucie County, the number of vacant new homes, though higher than in the past, is only a 2.6-month supply, Hunter said Friday. He expects "pent-up demand" to reduce that number in the coming months. "Drive till you qualify (for a home mortgage) means a lot of people will keep going to the Treasure Coast," Hunter said.
St. Lucie County development officials also remain confident there's no long-term slowdown in a housing market that includes Port St. Lucie, the second-fastest-growing city in the nation. After all, 1,000 new residents move to Port St. Lucie every month.
But if the number of vacant new homes in St. Lucie County continues to rise, "that would certainly put downward pressure on prices because the investors may begin competing with one another to sell their homes," Hunter said.
That could be good news for the many buyers forced out of Palm Beach County's pricey housing market, where more than half of all new homes ready to be built cost more than $500,000, according to the Metrostudy report.
"My husband and I combined make around $60,000 a year," said Laura Stremple, an accounting clerk at a hospital in Palm Beach County. "There's no way that we can afford a new home with the current prices skyrocketing out of control."
Existing-home prices in Palm Beach County also have soared, rising above a median price of $400,000 for the first time last month, the Florida Association of Realtors said earlier this week. Treasure Coast existing-home prices also surged in June, rising to a median of $260,700, a 38 percent hike in just one year, the Realtors' report shows.
New-home prices in once-affordable St. Lucie County also are gaining on Palm Beach County, the Metrostudy report shows. Of new homes ready to be built in St. Lucie County subdivisions, 28 percent will cost $750,000 or more — just 1 percentage point lower than the number of Palm Beach County homes in this price range.
Only 22 percent of all homes in St. Lucie County developments about to start construction are priced below $300,000, according to Metrostudy's report. Most of those homes are already under contract, Hunter said, showing there is strong demand in that price range.
Despite that demand, permitting problems and water woes slowed the pace of new-home construction in St. Lucie County in the first half of this year, the report shows. The St. Lucie West water plant broke down in February, leaving 7,500 homes and businesses without water for two days. The water plant failure prompted a two-month building moratorium that has since been lifted.
A backlog of new-home permit requests also slowed housing starts, Hunter said.
"The county and city planning departments in many areas of the Treasure Coast are somewhat overwhelmed," Hunter said. "It's taking longer to get permits because there's such a flood of applications."
Consequently, builders in St. Lucie County subdivisions broke ground on 902 new homes in the first six months of this year, a 36 percent drop from the 1,415 hew-home starts in the same period last year, Metrostudy said. There are 1,709 vacant lots in St. Lucie County subdivisions ready for building, an 11-month supply at the current rate of construction, the report shows.
In Martin County, developers started building 510 new homes from January through June, compared with 585 in the first six months of 2004, the report shows. Martin's Crossing near Stuart led all subdivisions in the county in housing starts, breaking ground on 145 single-family homes and 61 townhomes April through June.
"Martin County requires all wetlands to be preserved," said Lewis Birnbaum, vice president of operations for Centex Homes, one of the builders at Martin's Crossing. "I have to say the end result is a beautiful, environmentally friendly community, especially for families."
In other areas of the county, the expected development of Indiantown, a rural agricultural community west of Stuart, will significantly spur home-building, Hunter said. A real housing boom there is probably years away, though, because the tiny town lacks a lot of amenities that today's home buyers expect, he said.
"Developers will want to get the infrastructure in place," Hunter said. "It will be helpful in their sales process if they can show where a major grocery will be located and where a bank branch will be. They need to be able to show with certainty where some of the conveniences and services will be available. That will be important in establishing Indiantown as a popular address."
The impact of The Scripps Research Institute planned for northern Palm Beach County will have an impact on Martin County home-building, Hunter said, but that effect is at least several years away. Though many Scripps jobs will be relatively high-paying, Palm Beach County's escalating home prices already have squeezed families earning $40,000 to $60,000 — and even $100,000 — out of the housing market, economic development officials say. |
