And fewer moderately priced homes are being built, study shows
New home starts rose nearly 4 percent in Southwest Florida during last year's fourth quarter but the pace of annual starts was down slightly for the full year.
The supply of finished vacant housing units has been shrinking for a year, leaving the region with a low stock of completed new homes for sale, according to a new report from data supplier Metrostudy.
Builders broke ground on 1,276 single-family homes in the final three months of 2017, an increase of 3.7 percent over the year but a 15.5 percent drop from the third quarter.
The annual start rate of 5,581 homes was down by 0.4 percent, or 22 units, Metrostudy said.
Meanwhile, the supply of finished vacant housing units, expressed in the time it would take to sell them, stood at less than one month at the end of the year.
"Considering we are in the midst of 'snowbird season,' this is a low level of supply," said Tony Polito, regional director of Metrostudy's Sarasota-Bradenton market.
Home production continues to shift to higher price points. Annual starts of homes under $300,000 fell by 9.8 percent over the year, while new construction on homes above that price grew 7.8 percent.
"Demand remains strong, but home sales could be limited by affordability issues," Polito said. "The average new home price in Manatee and Sarasota counties rose 3.4 percent year-over-year, to $389,468 in 2017.”
Buyers closed on 1,290 single-family homes in the October-December period, 4.6 percent more than the same quarter last year.The annual closings rate was 5,449 units, 3.7 percent better than in 2016. But fourth-quarter closings were off by 3.1 percent from the previous quarter.
"Irma likely pushed some closings into 2018," Polito said.
Lakewood Ranch again led the region with 946 annual home starts in 2017. The West Villages was second at 611, followed by Palmer Ranch at 288, Grand Palm at 181 and South Gulf Cove at 162.
Polito’s report covers Manatee, Sarasota, and Charlotte counties and a small portion of DeSoto.
While the supply of finished vacant housing has been dropping and now stands at less than one month, the total inventory level of a 6.6 months' supply of new homes, including those under construction, is considered within equilibrium.
"Metrostudy believes demographics will support strong 'snowbird seasons' for several more years," Polito said.