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Home building, closings down by half in 2007

The housing market is nearing equilibrium, but there is an overflow of unused home sites.

By JAMES THORNER, Times Staff Writer
Published February 8, 2008

A mid-year credit crunch combined with a saturated housing market helped cut Tampa Bay-area new home construction by more than half in 2007.

The depth of last year's builder bust emerged in a report released Thursday by housing forecaster Metrostudy.

For the Tampa Bay metropolitan statistical area, new home closings dropped 37.8 percent last year, to 12,155 in 2007 from 19,451 in 2006. The rate of decline had accelerated by year's end, when closings were off by 50 percent from comparable months in the previous year.

Housing starts for 2007 plunged nearly 59 percent, to 7,408, from 18,158 in 2006. A start is defined by when the home's foundation is poured.

"The long-term cure is likely a price shift to get back in touch with buyers and their income levels," Metrostudy housing analyst Tony Polito said.

Thursday's report - which took in Pinellas, Pasco, Hillsborough, Hernando and Citrus counties - wasn't without a glimmer of good news.

Builders spent the latter part of 2007 working down unsold inventory, so much so that Polito predicts supply and demand could reach rough balance by the fall.

Move-ins have exceeded new home completions by 1,119 homes since the spring of 2007, meaning the supply is slowly tightening.

Less encouraging for builders was the massive and growing glut of developed lots waiting in the pipeline. Based on current sales, builders in the Tampa Bay area owned enough lots to last them 53 months, or 4 1/2 years.

The oversupply is most severe in Hernando County, which has enough home sites to last 91 months, or 7 1/2 years.

Polito said lot development has stabilized in every county but Hillsborough, where builders dumped another 1,500 lots onto the market in late 2007.

"Four of the five counties have stopped having the problem," he said. "Hillsborough was carrying the banner for everyone else."

In its list of the region's best selling neighborhoods for 2007, Metrostudy noted a relative improvement in less-expensive addresses, suggesting buyers are increasingly sensitive to price.

Places with above-average amenities and prices, like FishHawk Ranch and Sun City Center in southeast Hillsborough, dropped out of the top 10 last year.

Hot markets cool down

A mid-year credit crunch and a saturated housing market helped cut bay area new home construction by more than half in 2007. A look at the top neighborhoods for new home starts in 2006 and 2007 reflects the slowdown.

Top five for new home starts in 2007

Neighborhood             County       Home starts
Meadow Pointe           Pasco               183
Cypress Creek            Hillsborough     178
South Fork                  Hillsborough     149
Westpark Preserve    Hillsborough     148
Wexford                     Hillsborough      146

Top five for new home starts in 2006

[Last modified February 7, 2008, 23:21:03]