The Bradenton-Sarasota-North Port area has one of the largest shortages of new single-family homes of any market in the state, according to a new study by the National Association of Realtors.
Builders would have to start more than 14,000 additional houses to make up for the lack of supply, Realtor researchers said after analyzing new home construction relative to job creation in 117 metro areas nationwide.
In determining which areas had the greatest shortage of new single-family homes, the study found that the Suncoast area had a deficit of 14,073 houses to meet the needs of newly hired workers.
That ranked fourth in the state, trailing Miami-Fort Lauderdale-West Palm Beach (118,937), Orlando-Kissimmee-Sanford (47,351) and Tampa-St. Petersburg-Clearwater (39,034).
14,073 The number of homes the Bradenton-Sarasota-North Port area needs to meet the needs of newly hired workers, according to a new study by the National Association of Realtors
“Inadequate single-family home construction since the Great Recession has had a detrimental impact on the housing market by accelerating price growth and making it very difficult for prospective buyers to find an affordable home — especially young adults,” Lawrence Yun, the chief economist and senior vice president of research at the National Association of Realtors, said in the study.
“Without the expected pickup in building as job gains rose in recent years, new and existing inventory has shrunk, prices have shot up and affordability has eroded despite mortgage rates at or near historic lows.”
In the study, analysts looked at housing construction and demand for 117 major U.S. markets from 2012-2015, and estimated the amount of home construction needed to return to each market’s historical average.
Though building in Manatee and Sarasota counties has improved since the recession ended, the 9,166 single-family permits pulled from 2013-15 weren’t enough to keep up with the need, the report stated.
“This is evidence of what we see every day in the marketplace. There are more buyers than properties,” said Linda Formella, the president of the Realtor Association of Sarasota and Manatee. “The result is increasing prices for the available properties and buyers who would like to buy, but cannot. They are either priced out of the market or are so frustrated that they choose to sit on the sidelines and wait.”
With 36,950 jobs created along the Suncoast during the three-year period, according to the report, the ratio of employment over permits was 4.0. A balanced market’s ratio is 1.6, Yun said. Eighty percent of the 117 markets examined in the report had a ratio above 1.6, and the average was 3.4.
“I do see the (Suncoast) area being able to reduce that number in the coming years because we have available land and buyers who would like to buy in this area,” Formella said. “The shortage is due to a combination of factors, including a shortage of skilled laborers to build the houses, the cost of infrastructure and land costs. If, and when, the skilled labor force either returns to or enters this market, we will see an increase in new construction. The question about the affordability of those properties will still remain.”
This is evidence of what we see every day in the marketplace. There are more buyers than properties.
Linda Formella, the president of the Realtor Association of Sarasota and Manatee
The areas with the biggest need for single-family housing starts were New York (218,541), Dallas (132,482), San Francisco (127,412), Miami and Chicago (94,457).
The National Association of Realtors report comes as homebuilders pulled back on construction in the South, causing the pace of August housing starts nationwide to fall to their lowest level in three months.
Despite the monthly decline, construction activity has accelerated for much this year. Builders are increasingly optimistic about sales growth, a reflection of how steady job gains are leading more Americans to purchase new houses and sign leases for new apartments.
In August, ground breakings dropped 5.8 percent to a seasonally adjusted annual rate of 1.14 million from 1.21 million in July, the Commerce Department said Tuesday. The pace of construction was the lowest since May.
Starts plummeted 14.8 percent in the South, likely reflecting the monthly volatility of the government report. Building activity increased in the Northeast, Midwest and West.
Jennifer Lee, a senior economist at BMO Capital Markets, blamed the decrease in construction in the South on August rainstorms.
“Look for a rebound in the next month or two,” Lee said.
Information from the Associated Press was used in this report.