By SHANNON BEHNKEN, The Tampa Tribune
Published: January 18, 2008
TAMPA – In the face of rising inventories of vacant homes and declining orders for new ones, Tampa Bay homebuilders slashed construction 59 percent in 2007, according to preliminary data released Thursday by Metrostudy, a Houston-based housing research firm.
In the fourth quarter, they broke ground on 1,523 single-family and town homes in the combined markets of Hillsborough, Pinellas, Pasco, Hernando and Citrus counties examined by Metrostudy. That’s down 50 percent from the same quarter a year ago.
"The good news is that the fourth-quarter drop isn’t as bad as the yearlong drop," said Tony Polito, director of Metrostudy’s Tampa Bay division. "We think builders are trying to build to demand."
The Bay area isn’t in a vacuum. Nationwide, the prolonged slump in housing pushed construction of new homes in 2007 down by the largest amount in nearly three decades, according to figures released Thursday by the U.S. Commerce Department. Analysts forecast more bad news in the months ahead, leading to bigger questions: Will the housing slump be severe enough to push the country into a recession, and how much more will prices fall?
Mark Zandi, chief economist at Moody’s Economy.com, is forecasting that median sales prices for existing homes will fall by 2.5 percent for all of 2007, which would be the first annual price decline on records that go back four decades.
For the Bay area, prices are expected to fall even more during the coming year. Mike Larson of Weiss Research in Jupiter has said that Bay area home prices could drop as much as 10 percent in 2008.
Cut In Starts Doubles National Average
Zandi said the housing downturn will be unprecedented in its breadth across the country and its severity.
"I don’t think we have seen anything like this, certainly since the Great Depression, and back then housing was much less of a factor in terms of the overall economy because fewer people owned their own homes," Zandi said.
In Florida, the cut in housing starts was more than double the national average, said Chris Lafakis, who covers Florida’s economy as an associate economist at Economy .com. To adjust, Lafakis expects Florida homebuilders to continue their construction slowdown until the fall.
"Tampa is ahead of the curve," Lafakis said. "The only way to rid ourselves of this situation is to cut back. We have too many homes for sale and not enough buyers."
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http://www2.tbo.com/content/2008/jan/18/bz-housing-slump-continues-bay-area-has-worst-hit-/
