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Lists of Foreclosures Weaken Impact on Florida Home Starts

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By : John Cutts    99 or more times read
Lists of foreclosures in South Florida, although still growing, are showing weakened impact on housing starts, based on a report released recently by residential consulting firm MetroStudy.

Last year, in the fourth quarter, some home builders have finally come out of their long hibernation and started building new homes. In Miami-Dade County, builders started building 54 new units of single-family housing, up from only 17 units in the third quarter and the biggest number reached in more than 12 months.

In Broward County, 28 single-family detached houses were started, up from the 23 units started in the previous three-month period.

In contrast, Palm Beach County showed a drop in home starts. However, the county had the biggest number of housing starts in South Florida over the past year. In the last quarter, 227 single-family houses were started, up from the 260 units started in the July to September quarter.

Across South Florida, which encompasses the counties of Broward, Miami-Dade and Palm Beach and includes the cities of Miami, West Palm Beach and Fort Lauderdale, the number of single-family houses attached to another property increased from 128 units in the July-September quarter to 190 units in the fourth quarter.

Because of the increase in home starts, the inventory of completed attached single-family houses in South Florida has now reached a supply level of 14 months.

However, the inventory of housing starts in the region remains far below the number of home starts during the time lists of foreclosures have not yet battered the home building industry. Bradley Hunter, director of MetroStudy’s research operations in South Florida, said home starts will further increase when house prices rises from their bottom levels.

At a meeting of Wharton and Harvard School alumni club members in South Florida, Hunter told participants that home builders have been buying vacant lots while waiting for the market to recover fully. He also told them that he still expects a ten-percent decrease in the prices of existing homes and a six-percent decrease in the prices of new homes.

He also explained that the expectation of further drops in home prices is putting a drag on housing recovery. Other factors are fear of job loss and difficulty in getting financing.

Additionally, Hunter also said that the housing market and the home building industry will face greater challenges as the scheduled resetting of adjustable rate mortgage loans will put more homes into lists of foreclosures over the next couple of years.

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