Orlando leads in new-home construction
The pace of home construction in the Orlando area, which slowed to a crawl during the housing slump, is now outpacing that of almost every other metro area in the country.
Rows of older houses are being bulldozed on Winter Park streets to make way for new, custom-built homes. In the newest phase of Reunion Resort in Osceola County, buyers are reserving lots even though they don’t expect delivery of their house for 18 months. And production builders are selling houses that are twice the size of a typical Orlando-area home, with some featuring multiple staircases and kitchen islands the size of a compact car.
“The reality of the situation is that Orlando was one of the worst hurt from all of this, and now we’re beginning to see that the market overcorrected to the down side,” said Matthew Orosz, co-president of Royal Oak Homes. “Orlando has always been a high-growth area, and this is just getting back to a more normal pace.”
Among more than 360 metropolitan areas nationwide, Orlando in the second quarter surpassed all but four in terms of building-permit activity, Census data shows. The number of permits issued for single-family homes in the four-county metro area grew by 3,085 — more than in Atlanta, Houston, Dallas and Washington, all much-larger housing markets.
Last year, governments in Metro Orlando issued more than 12,000 permits for homes, apartments and town homes — quadruple the total in 2009, though still nowhere near the 36,137 permits issued at the peak of the housing bubble in 2006.
Seminole County is nearly built out. Osceola County’s recovery has been strong, and developments in the south Lake County communities of Clermont, Minneola and Groveland are all “very hot,” Orosz said. Orlando’s Lake Nona area, he added, is also doing well. Much of the property that was financially underwater after the real estate slump has been sold, except in the far reaches of the metro area, builders say.
One of Orosz’s big sellers is a home model with 4,700 square feet, two stairways and a 12-foot-long kitchen island.
That’s because Orlando is still a “big box” market, according to new-home analyst Anthony Crocco, with buyers who are interested in smaller lots and bigger houses that can accommodate multi-generational families.
“I don’t see that changing,” he said.
Crocco, regional director for Metrostudy, said Orlando is hitting its historic stride of about 10,000 single-family home starts a year. With little property left to develop in Seminole, developers are moving farther out in south Lake, southeast Orange and even northeast Polk and west Volusia counties, he said. East Orange, he added, still has an abundance of lots available.
The current boom comes a mere four years after Central Florida’s new-home market ground to such a standstill that developments throughout region were mothballed. During the downturn, builders produced only about one house for every 10 houses they had produced during the peak of the housing bubble.
“It’s totally opposite now from ‘The Darkness,’ ” said Tolaris Realty President Rick Bavec. “People are scrambling for land. There are major renovations and remodelings in Alaqua, Heathrow and Heathrow Woods. In Isleworth, you have a lot of teardowns.”
The comeback has been so sudden that construction crews can be as difficult to find in Central Florida as choice tracts of developable land. Bavec said construction workers are in high demand now because so many of them moved to other parts of the country when the market slumped and have been slow to return because they view conditions as still being volatile. Framers in particular are at a premium, he added.
How long the boom lasts is difficult to say. David Guarino, financial analyst for Ledford Wealth Management Group in Orlando, said concerns exist about continued job formation.
Even so, he added, so few homes were built from 2009 until 2012 that inventory has been relatively low. In addition, he added, Orlando is able to draw retirees and vacation home buyers so it is not a severely impacted by jobs as some markets.