Pace of residential move-ins continues to fall

WEST PALM BEACH - Metrostudy’s fourth-quarter survey, a quarterly count of all new housing units in Naples-Fort Myers subdivisions, showed the current annual pace of move-ins into new single-family homes to be less than half the pace of a year ago, and less than one-third the peak pace recorded in the third quarter of 2005. Although quarterly move-ins increased slightly, from 473 to 552 units in the fourth quarter, the annual pace of move-ins declined from 3,442 to 2,886 units.

“Inventory levels of completed and under-construction units continue to dwindle, but the move-in pace has been dwindling faster,” said Bradley F. Hunter, who directs Metrostudy’s market research operations in Southwest Florida.

Meanwhile, sales of existing homes have been climbing, partly because of low prices on distressed homes. “Mortgage foreclosure filings remain high, with approximately 6,443 new cases filed in Lee County and 2,007 new cases filed in Collier County during the fourth quarter,” Hunter said. “Increased supply from foreclosures and reduced demand from job losses continue to take a toll on the local new-housing markets, as reflected in the falling rate of annual move-ins.”

According to the Bureau of Labor Statistics, during the 12 months ending in December 2008, Florida lost 264,000 jobs. Collier and Lee counties lost 21,532 jobs during the year.

Statewide, the unemployment rate rose to 8.1%, respectively, during the fourth quarter of 2008. The unemployment rates in Collier and Lee counties reached 10% and 8.1%, respectively. These rates and the statewide rate were well above the national rate of 7.2%. All figures are seasonally adjusted.

“Combined quarterly new-home starts in Collier and Lee counties fell from 359 to 231 units during the fourth quarter. However, quarterly move-ins continued to outpace starts by a wide margin during each of the last nine quarters, allowing inventory levels to fall,” Hunter said.

The inventory of finished vacant units declined from 977 units at the end of the third quarter of 2008 to 938 at the end of the fourth quarter of 2008. Finished vacant inventory peaked at 2,306 units in the fourth quarter of 2006.

At the end of the fourth quarter of 2008, there was a 3.9-month supply of finished vacant housing inventory in the two-county area, at the current move-in pace. A normal months-of-supply level of finished vacant units in a healthy market is between 1.5 and 2.5 months, Hunter said. The number of units under construction decreased from 731 to 510.

The top 10 Naples-Fort Myers communities, ranked by annual new-home starts, are:

- Bella Terra: 91

- VeronaWalk: 81

- Lely Resort: 70

- VillageWalk Bonita: 66

- Ave Maria: 57

- Port of the Islands: 57

- Plantation: 55

- Botanica Lakes: 49

- Verandah: 44

- Bella Vida: 40

Collier County

With only 75 homes started during the fourth quarter of 2008, quarterly starts reached their lowest level in more than a decade in Collier County. In the third quarter, there were 137 starts. The peak was 902 starts in the second quarter of 2006, Hunter said. The annual starts pace fell 24.8% from the previous quarter, to 566 units, the lowest number of annual starts in more than 10 years.

There were 222 move-ins during the fourth quarter of 2008, a 29.1% increase from the third quarter of 2008. The annual rate of move-ins fell 14%, to 1,243 units, during the fourth quarter. The record annual pace of move-ins was 2,963 units, reached in the third quarter of 2005, Hunter said.

During the fourth quarter of 2008, the inventory of finished vacant housing in Collier County fell 7% to 544 units. At the current move-in pace, this represents a 5.3-month supply, equal to the record level of the fourth quarter of 2007.

The inventory of under-construction homes fell from 270 units in the third quarter of 2008 to 180 in the fourth quarter. Total inventory, which includes finished vacant units, units under construction, and model homes, fell from 1,069 to 922 units during the fourth quarter, representing an 8.9-month supply at the current annual move-in pace. This was the ninth consecutive quarter of declining total inventory.

Vacant developed lots totaled 5,384 at the end of the fourth quarter, a 114.1-month supply at the current low annual starts pace.

Lee County

In Lee County, there were 156 single-family home starts in subdivisions during the fourth quarter of 2008, compared to 222 starts in the third quarter. The annual starts pace fell 6.3% during the fourth quarter, to 742 units. The annual starts pace was the slowest recorded in more than a decade.

“There were 300 move-ins during the fourth quarter of 2008, nearly the same as in the third quarter. Annual move-ins fell 17.7% during the fourth quarter, from 1,999 to 1,646 units. The annual pace of move-ins has not been this low in more than a decade,” Hunter said. “The record pace of move-ins was 5,974 units, reached in the first quarter of 2006.”

The level of finished vacant inventory showed little change, increasing from 392 to 394 units during the fourth quarter. Because of the falling annual move-in pace, the finished vacant months of supply level increased from 2.4 to 2.9 months at the end of the fourth quarter.

The inventory of under-construction homes fell from 461 units in the third quarter of 2008 to 330 in the fourth quarter. Total inventory, which includes finished vacant units, units under construction, and model homes, fell from 1,012 to 868 units during the fourth quarter, representing a 6.3-month supply at the current annual move-in pace.

Vacant developed lots in Lee County totaled 8,897 at the end of the fourth quarter, a 143.9-month supply at the current low annual starts pace.

Metrostudy is a provider of primary and secondary market information to the housing industry and related industries nationwide.