Outlook for 2003:
The outlook for this year is good — we expect the currently strong trend in housing activity to continue. There may be some slight adjustments to the market later in the year, but ultimately the numbers will be very strong continuing into 2004. The latest declines in mortgage interest rates have reinforced our expectations.
Biggest source of concern for builders:
The availability of lots is a big issue. That’s due to a strong market as well as to the processing time it takes to bring lots on line, and also to the availability of land per se. It’s not so much that there isn’t enough land as that it takes a while for buildable lots to go on the market. Much of Pinellas County is built-out, except for some infill locations. We’ve also had an urban service boundary (urban growth boundary) for the last eight or nine years in Hillsborough County. That’s a magic line that limits the supply of land.
The tri-county area offers something for everyone in terms of waterfront and canal-front homes, high-end and affordable, and a real market is developing for infill homes. However, it can be very difficult to win zoning approvals for these due to local resistance to change inside existing neighborhoods
Traditional suburban development is running very strong, but we’re also seeing an emerging market for neo-traditional development — a number of these communities have been built in recent years. Traditional builders are venturing into this market; it’s not limited to just the “cutting edge” builders. Builders are offering their own versions of the New Urbanist development by building a suburban community with the ambience of neo-traditional design. We’re also seeing a strong movement toward downtown housing, and our builders association is launching a downtown housing program to work with communities toward surmounting the typical barriers to that kind of development.
All this is part of the Smart Growth movement, and it’s also about tapping into a shift we’ve seen in buyer preferences in a certain part of the market. We’re finding that some municipalities with predominantly office space in their downtowns are expanding their vision to include housing, as well — and not just high-end product, but the full range of housing meant to accommodate people who need to live near their downtown workplaces.
Remodeling is very strong, especially in areas like Pinellas County where there’s little room for new subdivisions. There, a large portion of the future residential activity will be in the form of infill and remodeling. Also, in Hillsborough County, entire neighborhoods in the downtown section have been totally remodeled into very high-end units. Communities that were built 20 years ago are being remodeled to accommodate the latest technologies and conveniences. In these places, long-time residents prefer to update and upgrade their current homes rather than move out of the neighborhood.
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