Several cities in the region score high in new homes approved.
We are building. And they are coming.
That’s a key takeaway from a new study that found even amid the COVID-19 hangover of sluggish supply chains and personnel shortages, Florida remains among the most robust homebuilding states nationwide. MSAs across the west coast of Florida are among the top 20 in new housing units authorized per 1,000 existing homes in 2021.
Researchers at residential, insurance and commercial property inspection software firm Inspection Support Network analyzed the latest data from the U.S. Census Bureau and Zillow for the report. In general, fast-growing states in the Mountain West — Utah, Idaho and Colorado — along with Sun Belt destinations, such as Texas and Florida, lead the nation in the rate of new housing authorizations relative to existing homes. And even though the real estate market has shown some recent signs of cooling against inflation and a rise in mortgage rates, people remain heavily focused on Florida, the report shows.
With 36.2 new housing units per 1,000 existing homes authorized in the Sarasota-Bradenton region, for example, builders are responding to the need in that market at a rate nearly triple the 12.5 new units authorized per 1,000 existing homes nationally. Lakewood Ranch-based Neal Communities Chair Pat Neal, in an interview with the Sarasota Observer, sister paper of the Business Observer, says the demographics of the new residents in the Sarasota area are shifting — and homebuilders are responding.
“At least since June 2022, we have been selling homes to people from New York, Philadelphia and Chicago, as we always do, but in bigger numbers now,” says Neal, whose firm, with $528.29 million in revenue in 2021, has projects in Venice and Southwest Florida, in addition to Sarasota-Bradenton. “But in 2021 we sold 39 homes to people from California, which we rarely ever do. Our customers, who are younger and more likely to be in their working years than before, have chosen Florida as an alternative destination because of our freedom, the way COVID has been handled here, and the lower tax environment, particularly lower than Illinois and California.”
Outside Florida, on a national level, federal mortgage backer Freddie Mac has estimated a nationwide housing supply shortage of 3.8 million homes, the ISN report states, citing in part a decline in single-family home construction — particularly starter homes — since the 1980s. The condition is exacerbated as millennials enter the home-buying market, partially driven by median rents surpassing $2,000 a month nationally for the first time, and as the ability to live anywhere and work remotely has become more the norm than the exception.
Neal says his company’s customers are a reflection of the remote work trend among mid-career families. The CEO of one of the region’s other large, locally-based homebuilders, Willy Nunn with Riverview-based Homes by WestBay, has seen the same trends. It’s partially why Homes by WestBay acquired thousands of lots in the Tampa region during the pandemic, to stay ahead of the trend.
“I think this is just the beginning,” Neal says, adding the state will have “a long and successful run of attracting not only people of retirement age, but younger people relocating their work and families to Florida.”