Glut of Empty Homes Up and Down the Treasure Coast
A glut of new but vacant homes continues to dominate the landscape of the central and northern portions of the Treasure Coast, a Florida housing report released last week suggested.
West Palm Beach-based Metrostudy, which tracks new-home starts, reported 2,391 homes were completed in St. Lucie and Indian River counties during the past three months — and they still have no occupants. At the current pace of people buying homes and moving in, it should take about nine months to fill the St. Lucie County inventory and 13 months in Indian River County.
Martin County had 398 homes completed but remaining vacant during the second quarter.
“Martin County has always had a reputation for being anti-growth, anti-development, so at this point of the cycle, the market bodes well for them,” said Jack McCabe, CEO of McCabe Research and Consulting a real estate consulting firm in Deerfield Beach.
Additionally, McCabe said subdivisions with an overabundance of vacant new homes and “For Rent” signs may be deterring renters from becoming home buyers/Florida mortgage borrowers — further pushing up local inventory levels.
“Some of the homes are sitting out there with weeds, without air-conditioning, maybe even growing some mold,” McCabe said. “If I am buying a house, I want to buy in the community with swing sets and bicycles on the street, not where it’s empty and I’d be taking a risk.”
A year ago, of the 5,405 homes built during the second quarter on the Treasure Coast, 1,927 were considered part of a vacant supply. The estimated timeline to fill those homes was estimated at that time at more than 19 months.
“Although record high inventories and reduced starts and homes under construction are not something the construction community can jump for joy over, it is a positive sign that the move-in differential is causing the inventories to start a downward trend,” said custom home builder Richard Hope, president of Hope Co., a general contractor in Vero Beach. “Now is a great time to buy, especially for the first time buyer or current renter, since this is the market where a majority of these inventories exist.”
Don Santos, past president of the Treasure Coast Builders Association and president of Santos Construction, wasn’t surprised at the statistics in the report.
“Unfortunately these are a high count, which reinforces the fact that builders overbuilt inventory,” Santos said. “But there’s never been a better time to buy.”
The report noted 521 homes still were under construction in Indian River County during the second quarter, 205 in St. Lucie County and 39 in Martin County.
Sally Daley, owner of Daley & Co. Real Estate in Vero Beach, agreed this is a good sign of a buyer’s market.
“After months of inventory outpacing buyer demand, inventory of vacant homes — many offered by mom and pop investors unsuccessfully trying to flip properties for profit — is finally reducing to meet buyer demand as exuberant sellers and developers ratchet down their expectations and in many cases seek to simply sell for little or no profit to simply unload the properties,” she said. “Such activity is typical of a buyers’ market and an essential, albeit painful, step toward more balanced [Florida real estate market] conditions between supply and buyer demand.”
In St. Lucie County, builders have reduced starts by 73.5 percent since the peak of 775 units reported in the third quarter of 2006. There were only 205 starts in the second quarter, a level not seen since 2001.
New home starts have dropped 20.5 percent between the first and second quarters in Indian River County. And Martin County’s new construction is down 70 percent since the peak in 2005.
