The home building rates in Palm Beach and Broward Counties have slowed to a crawl for lack of lots. According to HBWeekly’s market stats reports, Palm Beach County saw 2,132 starts on single-family homes, townhomes, and duplexes in 2014, a 3% increase year-over-year from 2013. Broward County’s starts reached 1,194, a rise of 7%. The growth came as a pleasant surprise, because both counties face severe land shortages which are impeding the development pipeline.
The housing boom of 2000-2005 saw 7,000-10,000 in housing starts for both counties, because there was land available then. The land constraints have resulted in a niche market which isn’t predicted to improve anytime soon. The available land in Palm Beach County is concentrated in the west-central corridor neat Boynton and Delray beaches. The land has yet to enter the development pipeline, and is as yet un-zoned and un-permitted pending several levels of government approval before construction can begin. Broward County is seeing construction in Tamarac, Pembroke Pines, and Parkland, the latter of which will see hundreds of new homes built over the next few years. Excepting those areas, the real estate market in Broward is set to focus on redevelopment.
Jim Carr, president of CC Devco in Palm Beach ,says that the lack of lots has led to bidding wars in Palm Beach and Broward counties. According to Carr, “Land prices are up dramatically, which is affecting home prices.” Carr adds that CC Devco is “doing very well in Palm Beach, but we have nothing else in the pipeline, and I’d like to have that very much. But prices have been driven up so far there hasn’t been anything we feel comfortable buying.”
Labor shortages are also a point of concern, though to a lesser extent. The housing market collapse drove subcontractors out of the industry and into new careers. This has left some small builders struggling to complete homes. Laborers prefer to work for the volume builders like D.R. Horton, Lennar, and KB Homes, rather than small local outfits, because the work is steadier. Scott Worley of the Gold Coast Builders Association says that existing subcontractors are able to charge more due to labor shortages, but that they aren’t willing to hire more help because the homebuilding market growth just isn’t there. “There’s a hesitation to take on additional employees to do more volume,” Worley says, “because they went through the traumatic downturn that has changed their perspective.”
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