Florida Builders Remain Cautious Amid Signs of Improvement
Florida builders say promising national figures on housing starts out Tuesday are a “very welcome sign” that the market may be reaching a turning point, but given the precarious nature of credit markets and a backlog of recently built homes, the industry remains very cautious.
Nationally, new housing starts were up 17.2 percent in May from a revised estimate in April as the nation's builders boosted production to an annualized rate of 532,000.
Federal stimulus efforts, including tax credits, may be luring buyers into the market, at least over the short term. The federal American Recovery and Reinvestment Act is allowing tax credits up to $8,000 for first-time purchasers. But time is limited.
“Builders are fully aware of the upcoming expiration of the first-time home buyer tax credit on November 30,” said Edie Ousley spokeswoman for the Florida Home Builders Association. “Homes that get started now should be able to close by that deadline, and this may be spurring some of the latest construction activity."
Construction of single-family homes nationwide rose 7.5 percent to a 401,000 rate, the third straight monthly gain. Work on condominiums, townhouses and apartment buildings, jumped 62 percent to an annual rate of 131,000.
In the South, new starts increased by 17 percent, trailing the 29-percent jump in the western United States. Starts rose 11 percent in the Midwest and 2 percent in the Northeast.
Florida does not compile similar results, but Ousley said positive reports on existing home sales gains in May portend well for the construction market.
Sales of existing Florida homes rose again in April as the market continued to post year-to-year increases – thanks in no small measure to lower prices and lower credit costs for those who qualify for loans.
For the month, existing home sales rose 18 percent from April 2008, the seventh consecutive month of year-to-year increases, according to statistics compiled by the Florida Association of Realtors. Sales of condominiums also rose for the month, climbing 21 percent from April 2008. State officials hope the up tick continues.
“The Florida Association of Realtors released their sales numbers a few weeks ago and they showed a very good increase,” Ousley said. “I would suggest that our starts numbers (up 16.8 percent in the South) are in line with the increased sales of existing homes in Florida.”