Builders Coming Back to Life in Some Markets

Homebuilding in Southwest Florida and two metros in North Carolina are proof that growth can vary greatly from market to market. Florida could be showing signs of recovery as Neal Communities, a private builder in Southwest Florida secured 24 new contracts for homes in seven different communities in November. An October report put together by Manatee Association of Realtors found that the supply of new homes on the market continued to decline every month since October 2008. Prices in the area have remained affordable, leading to a recent upward trend. Neal Communities is based in Manatee County. “The Florida housing industry has been hit particularly hard by the economic downturn, but we have been extremely encouraged by recent indications that the local market is beginning to correct its course,” said Pat Neal, president of Neal Communities. But not all markets are behaving similarly. North of Florida, two cities in North Carolina are showing widely different outlooks, according to a report from John Burns Real Estate Consulting (JBREC). Charlotte, North Carolina has emerged a major finance market since NationBank’s acquisition of Bank of America (BAC) in 1998 and Wachovia’s nationwide expansion. But after both institutions fell into distress, unemployment and the housing market have since suffered in Charlotte. Raleigh, North Carolina rallied a new technology oriented employment base around its three universities: Duke, University of North Carolina and N.C. State. According to John Burns, Raleigh’s market will outperform Charlotte over the next few years. Jobs are leaving Charlotte on a 12-month pace of -5.7%, double Raleigh’s -2.4%, translating to 49,000 lost jobs in Charlotte compared to 13,000 in Raleigh. Homebuilding companies in Raleigh are finding work like Neal Communities in Florida. Several small, private companies headed by former division presidents will grow new business by putting affordable homes up for sale on lots purchased at discounted prices. HousingWire recently attended an auction put on by Hudson & Marshall in Dallas, Texas to see how low the mark-downs could get. One vacant lot sold for $450. Builders in Charlotte are not recovering at the same levels in Raleigh. Write to Jon Prior. The author held no relevant investments.

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3d rendering of a row of luxury townhouses along a street

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