Metrostudy: Tampa housing recovery depends on job market

TAMPA - Tampa’s new-home market remained a mixed bag during the third quarter. The good: Housing starts during the quarter were the highest they have been during the last four quarters and new-home inventory continued to fall. The bad: The move-ins or closings pace continued to decline, as the overall economy continued to effect new-home demand.

“A major issue in the market is the flow of capital to homebuilders and to home buyers. An area in which the federal government’s stimulus package did provide a boost to housing was the first-time home buyer tax credit. Extending this credit is critical to maintaining the momentum achieved in the housing market since the beginning of the year,” said Tony Polito, Tampa Bay director for Metrostudy.

According to the Bureau of Labor Statistics, during the 12 months ending in September 2009, the state lost 363,600 jobs. Yet this is an improvement when compared to June 2009, when annual job losses totaled 405,200.

The Tampa metropolitan statistical area, which includes Pasco, Hillsborough, Citrus, Hernando and Pinellas counties, lost 55,200 jobs during the year ending in September 2009. The Tampa MSA is currently 19th in the nation in terms of job losses. Tampa’s annual job loss rate was 4.5% for the 12 months ending in September 2009.

Statewide, the unemployment rate rose to 11.2% during the third quarter of 2009. Tampa’s unemployment rate increased to 11.7%, well above the national average of 9.8%.

Tampa posted 1,040 single-family housing starts during the third quarter of 2009. This is a decrease of 17.1% compared to last year’s third-quarter rate of 1,255 units. The annual starts rate decreased 30.8% from September 2008, to 3,580.

Closings totaled 1,033 during the third quarter, 33.3% below the 1,549 closings recorded during the third quarter of 2008. The annual closings rate was 5,093 units in September 2009, 33.6% below the annual rate of 7,671 closings reported in September 2008.

Metrostudy’s closings figures represent move-ins evidenced by actual signs of occupancy, said Polito, who noted that move-ins statistics are a better measure of actual user demand than others, including deed recordings and contract sales, both of which are artificially inflated by speculative purchases.

The most active price segment was from $150,000 to $200,000, with 1,243 annual starts and 1,524 annual closings. The $200,000 to $250,000 price segment followed with 811 annual starts and 1,127 annual closings. There were 708 annual home starts for homes priced below $150,000 and 920 annual closings in this lowest price category.

A positive trend is the decline in the number of finished vacant units, which has dropped for 10 consecutive quarters. Metrostudy uses finished vacant housing inventory as a fundamental indicator to monitor the health of the market. On an annual basis, finished vacant inventory declined by 908 units, with the third quarter reduction being 142 units.

However, because of the low closings rate, the months of supply of total finished vacant units - 4.9 months - is the highest in more than a decade.

Influencing the new-home market are improved trends in the existing-home market. The number of home sales tracked through the Multiple Listing Service has been exceeding last year’s pace. In September 2009, the median MLS home price was $137,800, which is down from $160,500 in September 2008, but is an improvement from $122,400 in January of 2009, Polito said. The supply of Tampa Bay MLS listings dropped from a 24.2-month supply in January 2008, to nine months in September 2009.

“Starts and closings of new homes are expected to contract through late 2009,” Polito said. “It will likely be 2010 before we see any positive annual housing starts data. In addition to a lack of job growth, negative factors affecting the market continue to be competition from foreclosures and buyers’ ability to qualify for mortgages.”

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