Housing statistics remain strong

By Josh Salman

Builders in Southwest Florida and across the U.S. continued their busy streak in November, breaking ground on more new homes than a year ago and preparing permits for the looming snowbird season.

Homebuilding activity this winter has slowed moderately from the post-recession highs set in the spring. But with one month left to go, 2013 already has become the best year for residential construction since the bottom fell out on the industry, taking the economy along with it.

The sector's rally comes as fierce demand from investors and retirees carve away existing home supply, lifting real estate prices and pushing more buyers toward new homes. With homebuilder confidence also mounting, most expect the market to continue rising well into 2014.

"The builders are very optimistic, after several years when they weren't building anything -- cutting their staff to the bare bones and selling homes near cost just to compete," said Jack McCabe, a Florida real estate analyst. "We will probably see this growth continue for homebuilders for a couple more years."

Builders pulled 211 permits to build new homes in unincorporated Sarasota and Manatee counties in November. Those figures were down 28 percent from October but still remained 26 percent ahead of the same time in 2012, according to county records.

Through 11 months of the year, the 2,791 new single-family permits issued represent a 43 percent increase over the same time last year and a 99 percent surge from those months in 2011.

Building permits measure housing units expected to begin construction within three months.

The government's building data were released a day after a report showed that confidence among U.S. homebuilders matched an eight-year high from August.

The outlook heading into spring -- the busiest time of year for homebuyers in Florida -- also has improved.

Those in the industry attribute the climb to pent-up demand from retirees. Coupled with an uptick in investor purchases, those two segments of the market are buying up the homes available for sale.

Existing home inventory has now stayed below what is considered equilibrium -- a six-month supply -- for more than a year. That is typically the measure homebuilders like to see before breaking ground on a speculative unit, or a new house without a buyer's contract in-hand.

Local job creation and improving economies in northern feeder markets also have translated to brighter builder sales here.

"A lot of people who were sitting on the sidelines, waiting to do something, are finally moving forward," said Britt Williams, president of Bradenton-based Bruce Williams Homes. "At first we sort of thought this was a just a blip again. But we're really seeing a strong upward trend, and I don't see that calming any time soon."

The National Situation

The momentum was similar across the country.

New U.S. home starts in November reached a seasonally adjusted annual rate of 1.1 million. That was 22.7 percent above the revised October estimate and 29.6 percent higher than November 2012, according to data released Wednesday by the U.S. Census Bureau.

The last time U.S. housing starts broke the million mark was in early 2008 -- the onset of the Great Recession.

U.S. homebuilders pulled new permits last month at a seasonally adjusted annual rate of 1 million, a 3.1 percent dip from the revised October rate, but 7.9 percent above levels from a year ago, records show.

"Single-family and multifamily starts are at five-year highs, providing additional evidence that the recovery is here to stay," said David Crowe, chief economist for the National Association of Homebuilders.

"We hit a soft spot this fall when interest rates jumped and the government closed down, but mortgage rates still remain very affordable, and pent-up demand is helping to boost the housing market. We expect a continued steady, gradual growth in starts and home sales in 2014."