South Florida Real Estate Blog - Updates & Realty News

South Florida’s new housing inventory is beginning to shrink, but it’s still high compared to normal levels, according to a new report by Metrostudy.

“The homebuilding industry is near a point where the inventory reduction task is essentially complete,” Metrostudy President Mike Inselmann said. However, he added that the housing market’s recovery won’t begin to take place until the number of existing homes for sale is reduced, along with the number of foreclosures.

“Finished vacant inventory fell for the fifth consecutive quarter, from 5,038 units at the end of the third quarter of 2008 to 4,585 units at the end of the fourth quarter, according to Bradley F. Hunter, who directs Metrostudy’s market research operations for the South Florida market, which runs from Miami-Dade to Indian River county.

However, the months of supply of finished vacant homes rose to a record seven months as consumer demand continued to decline, Hunter said.

Quarterly housing starts in the six-county area fell to 348 starts in the fourth quarter from 850 starts in the third quarter of 2008, the report noted.

Annual starts for the 12 months ended in Dec. 31 fell 15.4 percent to 3,903 units – the 14th consecutive quarterly decline since the peak rate of 27,444 units recorded in the second quarter of 2005.

Total housing inventory fell 12.6 percent in the fourth quarter, to 7,317 from 8,375 units, the lowest level in more than a decade.

In Miami-Dade County, finished vacant inventory of single-family homes fell slightly in the fourth quarter, to 1,502 units from 1,665 units, while under-construction inventory fell to 580 units from 718.

“The slowdown in construction reduced total inventory to 2,444 units from 2,542, a 13.9-month supply at the current annual move-in rate,” Hunter said.

There were 5,196 vacant developed lots in Miami-Dade County at the end of the fourth quarter, down slightly from the previous quarter’s 5,268. That represents a 58.5-month supply of vacant developed lots at the current annual starts pace, more than double the 20 to 24 months of supply needed for equilibrium, Hunter said.

In Broward County, the supply of finished vacant single-family homes in active subdivisions fell slightly during the fourth quarter, to 1,509 from 1,098 units – a 9.1-month supply of finished vacant inventory.

Broward County had 2,644 vacant developed lots at the end of the fourth quarter, a 40.7-month supply at the current extremely low annual starts pace, according to Metrostudy,

In Palm Beach County, the number of finished vacant homes fell to 775 from 845 at the end of the third quarter, a 4.3-month supply at the current annual move-in pace.

“Because the annual pace of move-ins has slowed, the months-of-supply number has increased from 3.9 months at the end of the third quarter,” Hunter said.

The number of homes under construction fell to 571 in the fourth quarter from 736 units in the third quarter.

The number of vacant developed lots fell to 5,145 from 5,220, representing a 49.8-month supply at the current annual starts pace.

Source: South Florida Business Journal