RISMEDIA, July 31, 2007—(MCT)—The number of individuals and families moving into new homes in Orlando-area subdivisions plunged 26% during the second quarter, and home builders continued to slam on the brakes.
Starts, or new homes getting under way in the region, fell more than 41% in the period ending June 30 compared with the same time a year ago, a report by Metrostudy showed Thursday.
And despite efforts by builders to entice buyers with discounts and deals, more than 5,600 new homes still sit empty in the Orlando area, a number that’s virtually unchanged from a year ago, the Houston-based research company reported.
Unsold inventory did fall overall, a helpful sign for the health of the industry, but it was mostly in the under-construction category, said Anthony Crocco, director of Metrostudy’s Central and Northeast Florida divisions.
“The Orlando MSA metropolitan statistical area is experiencing the same problems many Florida markets are experiencing — large new- and existing-home inventories,” Crocco said in his quarterly report, which goes out to builders, researchers, academics and other professionals in the housing industry.
“The high percentage of finished, vacant inventory remains a major concern,” Crocco said. “On the upside, the Orlando MSA continues to add jobs and housing demand remains strong relative to most other markets in the state.”
In the four-county Orlando metro area — Orange, Seminole, Lake and Osceola counties — 3,299 single-family homes were started in subdivisions during the April-through-June time frame. That was down 41.4% from the same period a year ago when 5,631 units were started. On an annual basis, local housing starts are down 38%.
Closings, or the number of homes sold and physically occupied in the Orlando area, totaled 4,004, or 25.9% lower than a year ago, Metrostudy found in its survey. On an annual basis through the second quarter, closings were down 8.2%.
The survey data are considered valuable to the industry because Metrostudy, which charges fees for its reports, physically drives through subdivisions to verify whether new homes remain vacant or are occupied, a more reliable third-party measure of closings.
One of the Orlando area’s top retail-property brokers said Thursday that the slowdown in home construction in the suburbs means retail construction also will slow, particularly in outlying areas.
“Retail follows rooftops,” and the trend now toward urban in-fill development means that retail construction will shift from suburbs to downtown,” said Martin Forster, a director with Cushman & Wakefield of Florida Inc., and a partner in his own firm of Pocklington, Pocklington & Forster Retail Investment Group.
Forster spoke during a monthly meeting for the Central Florida Chapter of the National Association of Industrial and Office Properties.
With residential construction slowing nationwide, commercial construction has been taking up the slack, absorbing unemployed residential construction employees in many cases and generating ongoing economic impact.
Forster and other local experts who spoke, including top brokers Ron Rogg of CB Richard Ellis and Bo Bradford of GVA Advantis, said that strong global capital flows and low interest rates have kept commercial properties in hot demand and construction in high gear.
“Money drives the juggernaut,” Forster said, and financing has shifted from residential construction to commercial.
Copyright © 2007, The Orlando Sentinel, Fla.
Distributed by McClatchy-Tribune Information Services.
