Scarcity of open land slows home building in S. Florida

Many people think it is the start of the "bubble." Sorry folks real estate is still booming. I listed a house, put it in the MLS at 5:30 at night had an offer faxed to me by 6 pm with out ever seeing the house!

Recent headlines said New Construction starts are down... well hello?

Here is the except from the Herald regarding scarcity of Land.

With developable land running out in South Florida, only Palm Beach County saw home construction rise in the first quarter of 2005. The number of homes built in Miami-Dade and Broward continued to fall, according to data released Wednesday by market research firm Metrostudy.New single-family homes in Palm Beach County were up 11.1 percent compared with the same quarter last year, while Miami-Dade had a 20.9 percent decrease and Broward had the fewest number of homes built since 2000. Broward's home construction fell by 16.6 percent compared with last year.

"It's simply a lack of land," said Bradley Hunter, South Florida market director for Metrostudy.About 1,700 single-family homes or townhouses were built in Miami-Dade in the first quarter. More than half of the new homes were built in and near Homestead and Cutler Ridge. In Broward, there were about 800 homes built.

"Regardless of how good market fundamentals are, we're running out of land," said David Dabby, principal of real estate consulting firm Dabby Group Advisors in Coral Gables. "With the kind of land restraints we have, it's no wonder single-family starts are down."When reporting on Broward's home construction, Hunter says most development experts are surprised the number is as high as it is."The perception is that Broward is totally built-out," Hunter said.

"What's interesting is that home builders are still finding ways to build, which says Broward is down, but not out."In Palm Beach County, where new-home starts have been gradually easing since hitting a peak two years ago, 2,279 homes were built in the first quarter of 2005."In Palm Beach County, we're trending gradually lower because of land depletion, but still growing," Hunter said.

Mike Smolak, Palm Beach division president for Miami-based Lennar Corp., says even the threat of less land isn't deterring development."Whether new homes are up or down, demand is still very high here," Smolak said. "That forces prices up, and eventually you will see different attempts to meet those demands, whether it's more condos or infill projects that become more practical and economically feasible as you run out of land."Nationally, although the U.S. Department of Commerce announced a 17.6 percent decline in home construction, Hunter said a Metrostudy analysis of the government's numbers shows a different picture.

In single-family housing completions, the government said there was a 6 percent decline, but that figure had a 9.3 percent error range."The change is not statistically significant," Hunter said.What does concern Hunter are the escalating prices of new homes and whether buyers are occupying new homes or using them to quickly turn a profit."We'll watch for how much standing inventory there is with no one living in it," Hunter said. "That's going to be the best indicator of problems cropping up."