Mixed Messages in the Florida Housing Market
Housing starts decreased in Miami-Dade and Palm Beach counties from the first quarter to the second quarter, but the Broward County housing market saw its first rise in number of starts in several quarters.
That’s according to the Metrostudy housing market information firm.
The company said demand for housing across South Florida, which Metrostudy defines as Indian River County south through Miami-Dade County, remains strong, but the number of people who can qualify for a loan has been greatly reduced by a tightening of credit standards resulting from the “subprime mortgage meltdown.”
“Even though the fundamental market remains sound, the homebuilding and [Florida mortgage-lending industries] have created a series of problems that are delaying a rebound in home sales,” said Mike Inselmann, president of Metrostudy. “Investor inventory and mortgage defaults continue to be a drag on new and used home sales.”
Metrostudy said Broward County recorded 762 new home starts in the second quarter, a 68 percent increase from the 454 units recorded in the first quarter.
Though starts increased in Broward, absorption declined 4 percent - to 591 move-ins from 618 - the lowest level since the second quarter of 2006.
At the same time, the supply of vacant homes in the county rose to a new high, 724. That’s up 51 percent from the 479 units at the end of the comparable quarter in 2006 and up 10 percent from the 657 units at the end of the first quarter. Until prices come down more, Florida mortgage loan activity may remain stalled.
Under-construction inventory also increased to 2,070 at the end of the second quarter, up 4.5 percent from 1,979 units in the first quarter. However, this is down 23.6 percent from 2,710 units in the second quarter of 2006.
In Miami-Dade County, starts, absorption and finished vacant homes all declined.
New home starts decreased to 842 units in the second quarter, down 43.5 percent from 1,491 units in he first quarter and down 33.7 percent from 1,270 units in the second quarter of 2006.
This is significantly lower than the all-time high of 2,689 new home starts reported in the second quarter of 2005, and has not been lower in more than a decade.
