(Charlotte, NC – May 9, 2013) Same song, second verse, “All we need are jobs”. Charlotte’s unemployment rate dropped in March to 8.8%, but for the wrong reasons, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.
The Charlotte MSA’s annual job growth numbers continues to disappoint. It has dropped from 28,900 in November to 19,000 in March. Industry sectors showing the greatest Annual job growth are Leisure and hospitality at 7,100 followed by Professional and Business Services with 4,400. The Charlotte MSA’s current unemployment rate continues to decrease, now at 8.8%, but it’s still significantly higher than the national rate. “It’s the mysterious civilian labor force black hole that continues to swallow people the government says have quit looking for jobs, thus lowering the employment rate” said Bill Miley, Regional Director of Metrostudy’s Charlotte Market.
For the first quarter ending March 2013, Charlotte’s quarterly starts for all product types were 1,933, up from last quarter’s 1,674. The 1Q13 starts were 40.5% higher than the 1,376 starts from a year ago in 1Q12. Charlotte’s annualized starts as of first quarter increased to 7,166, a 28.5% increase over annual starts from one year ago. 1Q13 Closings totaled 1,715 units unchanged from fourth quarter which is traditionally one of our strongest closing quarters. “Closings continue to be constrained by low supplies of finished inventory for all product types which decreased from a 2.5 month supply in fourth quarter to a 2.2 month supply after 1Q13,”said Miley. Charlotte’s first quarter closings increased by 20.0% compared to 1Q12. The 6,850 homes closed in the past four quarters represented a 13.6% increase over 1Q12’s annualized closings.
Total Inventory of new homes in all stages of construction increased to 3,988 in 1Q13 from last quarter’s 3,770 due to strong quarterly starts. Total Inventory rose to a 7.0 month supply from last quarter’s 6.9. Under construction homes increased to a 4.1 month supply, finished vacant fell to 2.2 months and model homes remained at 0.6. The South Carolina market consisting of York and Lancaster counties had the lowest inventory supply at 5.8 months. A 7-8 month supply of inventory is considered to be in equilibrium. When viewed relative to Annual Closings, the 1,278 units of finished vacant inventory for all product types, decreased to a 2.2-month supply from 4Q’s 2.5 MOS. “Charlotte continues to close more homes each quarter than new ones are completed. This lowers the monthly supply and is the catalyst for increased quarterly starts,” said Miley.
The total number of vacant developed Lots in the market at quarter’s end was 31,574. Relative to starts, this represented a 52.9 month supply, rapidly dropping from the 59.1 month supply at the end of 4Q12. We should be approaching a 40 month supply by year’s end and back within equilibrium by the middle of next year. 1,933 vacant lots were absorbed in new starts while 954 new lots were delivered. A 26-30 month supply is considered to be within equilibrium. “As annual starts continue to increase, vacant lots will disappear significantly faster than newly developed lots are delivered. This is not expected to change in the foreseeable future. “Don’t be misled, said Miley, vacant lots in the best locations are already owned or under contract to the major builders.
“Despite low job growth, new housing activity is heating up in Charlotte. Annual single family permit activity is up 42.7% and actual physical starts are up 28.5%, which means we will continue to see more new housing starts in the months ahead,” said Miley.
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