As U.S. new home sales drop, Manatee, Sarasota markets grow
MANATEE -- The pace of new home construction in Manatee and Sarasota counties continued to pick up in August as the area continued to head toward a three-year high for issued construction permits.
Both markets accelerated compared to the previous two years, according to data compiled by the counties' building departments. Through August, 1,577 construction permits for new homes have been issued in Manatee County, a 7 percent increase from 2014.
Permits issued for homes in Sarasota County grew more modestly, 4.6 percent to a total of 814 through August.
Those permits are being issued as homebuilders see strong sales. In Lakewood Ranch, the center of much of Manatee County's new home construction, 388 new homes have sold through the end of September. That's up 6 percent from 2014.
"What is occurring is the fact that in Lakewood Ranch as a whole, there is a lack of available resale inventory," said Jimmy Stewart, the vice president of sales for Lakewood Ranch Communities.
The local picture comes as a contrast against what is happening nationwide. Sales of new homes plunged sharply in September to the slowest pace in 10 months, as higher prices and slower overall economic growth weigh on the housing market.
The Commerce Department said Monday that new-home sales slumped 11.5 percent last month to a seasonally adjusted annual rate of 468,000, the lowest level since November of 2014. September's drop ended a two-month streak of accelerating sales.
Americans' zeal for newly built homes took off this year -- yet now appears close to having topped out. Solid hiring over the past three years has improved many family balance sheets, while rising home prices has returned equity to current homeowners now seeking to upgrade to new residential developments. Sales of new homes have soared 17.6 percent during the first nine months of 2015.
But global pressures began to exert a downward pull on economic growth in recent months. Those pressures could be spread to the housing market if the drop in sales of new homes leads to a decline in construction.
"A stronger pace of sales will need to be seen for the recent stronger pace of single-family housing starts to be sustained," said Ted Wieseman, an economist at Morgan Stanley.
Job gains slowed in September, while profit margins for many of the largest U.S. businesses with a global footprint stopped growing. The stronger dollar has punished exports abroad and cheaper oil prices have forced energy firms to cut workers and slash orders for pipeline and equipment.
Purchases of new homes slid in the Midwest, South and West, but plummeted a stiff 61.8 percent in the Northeast.
Prices have climbed sharply as well, making new construction less affordable for would-be buyers. The median new-home sales price has jumped 13.5 percent from a year ago to $296,900.
The drop in sales increases the supply of new homes on the market. The Commerce Department said 5.8 months' supply of homes were available at the end of September, compared to a scant 4.9 months a month ago.
Still, inventories are tight across the housing sector. The National Association of Realtors said last week that existing homes sold at a seasonally adjusted annual pace of 5.55 million, advancing 8.8 percent from a year ago. But the number of listings on the market has dropped 3.1 percent during that time.
Matt M. Johnson, Herald business reporter, contributed to this report. He can be reached at 941-745-7027 or on Twitter@MattAtBradenton.