Report: New home construction in South Florida has bottomed out

Construction of new homes in South Florida has bottomed out, according to a Metrostudy report that said inventory is so low that some developers are having to build a new house for each one sold.

The report, released by the housing research firm today, even predicts a shortage of vacant land in Palm Beach, Broward and Miami-Dade counties as developers start snatching up parcels to rebuild their supply.

"Builders are out shopping for lots right now and that's only emerged in the past few months," said Brad Hunter, chief economist with Metrostudy. "We will almost certainly experience lot shortages in much of South Florida in the next few years."

Between Oct. 1 through the end of last year, construction began on 370 new detached homes in a six-county region that stretches from Indian River County to Miami-Dade County.

During the same period, 497 new homes had people move into them.

Palm Beach County made up more than half of the construction begun on homes during the end of last year with 227 houses, according to Metrostudy. During the same period, 245 homes had people move into them.

Hunter said he expects blips up and down in new construction as the housing market recovers, but that the analysis overall is good news for South Florida's economy, signaling an increase in job creation.

Some of the sale activity in the fall is attributed to the first-time home buyer tax credit, which had people rushing to purchase homes before an original deadline of Nov. 30. The tax credit, which is now available to some current homeowners, has been extended to contracts signed through the end of April 30.

Hunter warned, however, that the pace of move-ins has been "sluggish." People are still unsure about the economic recovery, may have trouble getting financing, and worry that home prices will continue to fall.

"We have those things gumming up the works," he said.

Still, home builders are planning for the future and expecting increasing sales.

New Jersey-based K. Hovnanian developers recently purchased unsold lots in the Tivoli Isles community west of Delray Beach.

Mark Hodges, Southeast Florida division president for K. Hovnanian, said the company has other properties in Palm Beach County they are considering buying.

"We are actively seeking land and feel that the time is right," Hodges said. "We sold nearly 300 inventory homes in the last two years and are completely sold out of single family and town home properties."

Source: Palm Beach Post, Kimberly Miller