Home starts sizzle in area

Home starts surged to a nearly 12-year high in Southwest Florida in the second quarter, with baby-boomer-driven demand still outstripping the supply of new homes.

Builders broke ground on 1,782 new local homes during the April-June period, a pace 17.2 percent ahead of last year and the highest total since the third quarter of 2006, according to a new report by data supplier Metrostudy.

New-home sales also are sizzling, with the second-quarter closing rate of 1,696 units nearly 9 percent ahead of 2017 and the most in a three-month period since 2007.

"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.

"Potential road bumps include rising interest rates, rising costs, affordability issues, public sentiment towards growth, the overall economy and the ability to sell homes 'up north.' "

Summer sales remained hot at Neal Communities, the largest locally based home builder. The Lakewood Ranch company sold 95 homes in July, 10 percent more than in June, bringing its year-to-date total sales to 695.

“While traditionally Southwest Florida real estate sees a decrease in sales and visitor traffic over the summer months, we’ve seen that trend reversed in the past three to five years,” said Carlos Puente, the builder's vice president of sales. “In June, Florida Realtor data also reported rising median prices, fewer days to contract and a continued tight supply of inventory in the resale market, which also fuels our sales success.”

John Cannon, president of luxury custom home builder John Cannon Homes, said the strong economy — with a growing workforce and a jobless rate falling to 3.7 percent in July — has helped spark sales.

"We find that our buyers are feeling positive about today’s economy, and we have seen an increase in sales and traffic in all of our models,” he said.

Two of Southwest Florida's largest developments ranked among the top five in a mid-year list of U.S. master-planned communities with the most sales.

Lakewood Ranch moved up one spot to second place, and the West Villages in South Sarasota County came in fifth on the roster of top-selling master-planned communities compiled by real estate consulting firm RCLCO.

The sprawling Lakewood Ranch, which straddles Sarasota and Manatee counties, posted 826 new-home sales in the first half of 2018, a 33 percent jump from the 622 reported in the comparable period last year.

The newer West Villages tallied 648 sales in the first six months of the year, the report said, a 23 percent increase from the 526 in the comparable 2017 period.

Sales in the Lakewood National section in Lakewood Ranch are up 23 percent so far this year, with July sales more than doubling to 22 over the year, said Lisa Barnott, director of marketing and communications at developer Schroeder-Manatee Ranch.

"What’s helping keep our area immune from downward trends? Other markets are land-constrained and heavily regulated," she said. "The Sarasota MSA had a great second quarter: inventories are in order, pricing hasn’t escalated and sales are brisk. We are one of the lowest-risk categories of any market."

The price range of $250,000 to $299,999 posted the most local starts and closings on an annual basis, followed by the $300,000 to $349,900 group. Starts and closings were lowest in the $150,000 to $199,999 range.

Just a little more than 20 percent of all new home construction was considered affordable, Polito said.

"Because demand is greater than supply, prices are above the long-term average, but nowhere near the over-valuation that occurred during the last housing cycle," Polito said.

During the second quarter, Manatee County recorded 801 housing starts, 27 percent ahead of last year, while Sarasota County showed 648 starts, nearly a19 percent gain.

The annual starts rate of 5,913 in Sarasota-Manatee-Charlotte was 5.6 percent ahead of last year. The annual closing rate of 5,484 units rose 2 percent.