Home Construction to Sustain Upswing


Homebuilders in the North Port-Sarasota-Bradenton metropolitan statistical area (MSA) stepped on the gas in April 2015, obtaining over 416 building permits for single family homes. This represents a 38% gain from 2014 and reverses a 16% decline in construction activity in the first three months of 2015, U.S. Census Bureau data indicate.

For the four-month period ending April, the MSA’s local governments granted a total of more than 1,700 residential permits, up 10% from a year earlier. The number of permits and percentage increase for this period are the largest recorded since the Great Recession when interest in Sarasota homes for sale hit its ebb.

A total of 541 building permits were approved in April of 2015, with more than three-fourths granted for the construction of single family homes. Seven were permits for multi-family residences with at least five units, which also represent a record high since the economic downturn.

Fuel from labor, population growth

Home Construction to Sustain Upswing

Moving forward this year and next, builders can find firm grounds for optimism that the current upsurge in home construction can be sustained. One positive factor is the improved labor picture, to which the recent spike in homebuilding is significantly contributing as well.

In an economic briefing this May, University of Central Florida economist Sean Snaith noted that the Sarasota area trimmed its unemployment rate to 5.3% in March 2015 from 6.1% a year ago. The local jobless rate is slightly better than the 5.7% clip estimated statewide for this March. Last year, Sarasota was among the top Florida metros in job generation, Snaith said.

Sustained population growth due to inward migration, which in turn stimulates housing demand, likewise augurs well for local homebuilding. In 2014, population in Sarasota County grew by 1.6% and by 2.7% in Manatee, Census Bureau figures show. These percentage gains were the largest for both counties since 2010.

Home inventory downtrend

A continuing decline in inventory of Manatee and Sarasota homes for sale coupled with sustained sales gain provides another incentive for homebuilders to pursue new residential development projects. Available resale single family homes in Sarasota as of April 2015 were estimated at 4.2 months’ supply, 19.9% lower than last year. Closed deals on Sarasota homes for sale during the month rose 4.2%, echoing respective increases of 2.4%, 10% and 13% from January to March for 2015.

In Manatee, April inventory was estimated at 4.3 months’ supply, down 9.7% which is the sharpest year-to-year drop so far in 2015. Manatee’s April closed sales were 7.6% above last year’s and follows up on the respective January-to-March increases of 20.7%, 5.7% and 11.5%.

Infill Sarasota homes for sale

These encouraging market data should provide further impetus to some infill projects in downtown Sarasota which were overtaken by the last economic downturn. One development which stands to benefit from the market’s upward momentum is the Homes of Laurel Park, a project for 19 custom single family homes. Its site is a three-acre parcel at Rawls Avenue and Devonshire Lane just a short distance south of downtown’s Main Street and Ringling Blvd.

This project pushing through soon should be welcome news to those in search of Sarasota homes for sale in Laurel Park. As of May 2015, there are just two listings in this property, in a way mirroring the low market inventory of single family homes locally which builders sure would be eager to fill.