Southwest Florida new homes are currently experiencing a boom, both in terms of starts and sales, as soaring demand puts pressure on supply. Q2 this year has seen a particularly lively market despite the summer being traditionally quiet. The boom in new homes reflects the general good health of the property market both in the US and in Florida.
New home starts highest for 12 years
The situation for new home starts is especially buoyant. According to a report published by Metrostudy, between April and June, construction started on 1,782 new homes in Southwest Florida. This represents a 17.2% increase on the same period last year and is the highest figure since Q3 2006.
“Second-quarter starts are typically a strong reflection of ‘snowbird season’ sales,” said Tony Polito, regional director of Metrostudy’s Sarasota-Manatee market. “Because of retiree demand, there will continue to be growth in starts and closings in Sarasota over the next few years.”
New home sales register 11-year record
The strong demand is also reflected in sales of Southwest Florida new homes, also with the wind in their sales. Buyers purchased 1,696 new builds in Q2 this year, a rise of nearly 9% compared to 2017. This figure also marks a new record – sales in Q2 were the highest since 2007.
As well as strong demand from retirees, the market is also experiencing pressure from other home buyer profiles. The current buoyant economic conditions in the US have led to optimism among buyers and a rise in consumer confidence. As a result, the market firmly belongs to the sellers.
Booming US property market
The market for Southwest Florida new homes doesn’t stand in isolation since the whole of the US is experiencing the same situation. A report by CoreLogic for the market in July revealed that sales rose by 6.2% year-on-year across the country in tandem with all-round price rises.
The report expects house prices to go up by 5.1% over the next year and claims there is still plenty of room for growth. According to CoreLogic calculations, US property prices remain 13.5% below their 2006 peak after adjustment for inflation.
Busy Florida property market
The Florida Realtors market report for July echoed the national situation. House prices in the Sunshine State saw their 79th consecutive month of rises. Single-family homes saw an increase of 6.3% in the year and condo-townhouse properties a price rise in 5.3%.
Strong demand was also apparent in sales figures, up by 3.8% for single-family homes and by 8.5% for condos and townhouses. And as a result, inventory levels remained anchored in sellers’ territory. In July, Florida had 3.9 months’ supply of single-family homes and 5.3 months’ for condos.
“We’re still squarely in seller’s market territory,” said Brad O’Connor, Florida Realtors Chief Economist, commenting on the figures for the Florida property market in July. “We’re going to need new single-family construction to ramp up even more.” The strong market for Southwest Florida new homes would appear here to stay.
(Source: Metrostudy, CoreLogic)