Housing Starts Increase In South Florida As Buyer Sentiment Improves
New homes are rising again across South Florida.
Palm Beach County single-family home starts jumped 37 percent last year compared with 2011, according to the Metrostudy research firm. Broward County starts are up 14 percent over the same period. Both counties have seen annual increases in each of the past three years.
Home construction is one of the leading indicators of a healthy economy as buyers show renewed faith in the region’s housing market.
“Demand is running ahead of production,” said Brad Hunter, South Florida director of Metrostudy. “Builders are having trouble finding enough lots.”
The bust forced more than 100 builders nationwide out of business. Among the casualties: Levitt and Sons of Fort Lauderdale, which built Levittown on Long Island in 1949.
But the surviving companies say the climate has improved dramatically, especially in the past year. Palm Beach County had 1,827 starts, while Broward posted 1,115. In 2009, the bottom of the downturn, Broward had fewer than 400 housing starts.
Buyers are capitalizing on still-low mortgage rates and looking to new construction because the supply of existing homes is so low. As demand increases, local builders are raising prices.
Builder CC Devco says it’s nearly sold out of the 680 single family homes at Monterra, a massive development in Cooper City that also features apartments and townhomes. CC Devco also has exceeded expectations with 70 contracts since October at the 300-home WaterView project in Miramar, principal Jim Carr said.
“There’s been a definite change in the market,” Carr said. “Consumers have finally realized that housing prices are probably not going any lower.”
In less than a year, Sunrise-based GL Homes has sold nearly half of the 590 homes at The Bridges, a luxury development on Lyons Road near Delray Beach, said Marcie DePlaza, division president. The builder expects big crowds when it opens two more model homes at The Bridges this weekend.
Sales are so strong that GL recently bought 610 acres just south of the development, with plans for another luxury project. “People are taking the chance again,” DePlaza said.
Toll Brothers is building high-end homes at Parkland Golf & Country Club and at five communities across Palm Beach County. The Horsham, Pa.-based builder has seen the return of waiting lists for homes.
“I feel like the market is in a pretty good place,” said Jim McDade, regional president for Toll. “If the buyers have the means to make a move, they’re making the move.”
Broward’s market isn’t as strong as Palm Beach County’s because available land is more scarce, but construction should pick up this year as Lennar Corp. and Standard Pacific Homes open developments in Parkland, Metrostudy’s Hunter said.
Despite the uptick in construction, builders remain far off the pace they set during the housing boom. In 2005, for example, both Palm Beach and Broward counties had 2,000 to 3,000 housing starts a quarter, Hunter said.
Metrostudy employees count home starts each quarter by driving through all the active subdivisions in a county. The firm says its method provides a more accurate assessment of demand than public records.
Metrostudy and other market followers say they expect the building industry to continue to recover in 2013, despite shortages of land and labor and increasing costs of materials.
“I see more blue skies than anything else in South Florida,” said Anthony Trella, a building consultant in Deerfield Beach. “But it’s going to take quite awhile for the industry to reboot its labor forces and supply lines.”
Single-family housing starts have steadily increased in Broward and Palm Beach counties since hitting bottom in 2009.
PALM BEACH COUNTY