MIAMI, FL - New housing construction has all but stopped in South Florida - leaving one of the region's major pools of employment bone dry - as banks have cut off loans for new projects, builders worked to sell off existing homes and buyers largely sat on the sidelines. Real estate analysts and even home builders aren't discouraged, however. They say a freeze must precede a thaw, welcoming the slowdown in new building in a region that was grossly overbuilt during the housing boom.
The numbers, culled from the first three months of 2009 and reported Monday by Metrostudy, a national housing market research firm: In Miami-Dade, construction was started in the first three months of the year on a scant 43 single-family homes. Builders in Broward started only two new condos.
That near-cessation in new building is necessary for a housing market with a huge backlog of unsold homes to climb back on its feet, real estate analysts insist.
''No starts are good starts right now,'' said Adam Greenberg, managing director with BayBridge Real Estate, a Miami-based consultancy. ''That is really what we need to get the absorption out of the way and stabilize the market. No matter how much housing policy you have, none of it will work if you keep flooding the market with units. This will start bringing value to existing units.''
Another set of numbers, released Monday by The National Association of Realtors, brought positive news, analysts say. The monthly pending home sales index, which tracks signed contracts for home purchases, rose 3 percent in March from February's and was up 1 percent from the same month a year ago.
In South Florida, where home prices keep plummeting, pending sales surged - up 36 percent in Miami-Dade and 34 percent in Broward. That represented triple-digit increases from a year ago.
At the same time, new construction slowed to a trickle and builders laid off workers in droves. Contractors broke ground on just 17 new single-family homes in Broward.
Construction on two new projects - the Rosabella Lofts close to downtown Miami and a tower at St. Tropez Waterfront Condominium in Sunny Isles Beach - represented the bulk of the 314 condo units started in Miami-Dade.
The first-quarter numbers marked the 13th consecutive quarterly decline in the total number of single family homes under construction in Miami-Dade and the seventh consecutive quarter of declines in Broward, according to Metrostudy.
The construction slowdown is taking a toll on many, especially those who ply their trades in painting, concrete work, cabinetry and other related construction skills.
In order to survive, Michael Perez, 38, who lost his job with a general contractor, runs a small handyman business to supplement his unemployment checks. The odd jobs, including one he got Monday to revamp an electrical panel for about $500, help him pay the rent and feed himself.
The drought in construction work is the worst the electrical contractor has seen in his 12 years. He's consider moving back up north. ''It's dead,'' Perez said.
The slowdown also has clobbered home builders. Last year, several major builders were felled, including WCI Communities in Bonita Springs and Hollywood-based Tousa, which filed for bankruptcy. Fort Lauderdale's Levitt & Sons liquidated, along with dozens of smaller, private builders.
The Metrostudy data also showed the number of buyers moving into new homes during the first quarter was off slightly in both counties for a combined 423 sales. Financing hurdles and competition from deeply discounted distressed, older homes are diverting many buyers from the new-home market.
Condo closings on new construction were down in Miami-Dade to 1,045 from 1,402 in the last three months of 2008. They were up in Broward, from from 110 to 180 closings.
''The biggest competition to builders are not other builders but the resale market,'' said Anthony Seijas, president of the Latin Builders Association. "Until all the inventory on the [Multiple Listing Service] comes down, it wouldn't be a surprise to me to see a continued decrease in housing starts.''
Seijas also said that builders in his association had made a concerted effort to pull back on the ''number of homes they put in the ground,'' and that builders, like condo developers, were resorting to renting unsold homes rather than slashing prices in order to compete for buyers who are primarily hunting for fire sales.
''Miami-Dade was severely afflicted by the speculator boom,'' said Brad Hunter, Metrostudy's chief economist who is based in West Palm Beach. ''The first market in the country to tumble was Las Vegas, then Miami.''
As a sign that the bottom may be getting nearer, Hunter pointed out that the number of new homes selling is finally outpacing the number of homes being built. New inventory, or the number of homes on the market, is also shrinking.
In the single-family sector, he said, Miami-Dade has seen the number of homes listed for sale fall by 53 percent compared to the first three months of 2007 and by 50 percent in Broward during that same period.
Condos don't fare as well, nor do attached single-family homes, such as town houses, Hunter said. "Miami is worse off than a lot of other markets,'' Hunter said. ''However, in terms of detached homes, it is improving rapidly.
Source: MiamiHerald.com