South Florida New Home Construction Slows on Account of Land Shortage

The Sun-Sentinel is reporting today that the building of new homes was down for the first quarter of 2005. All over Southern Florida, and particularly in Miami-Dade and Broward counties, new home construction levels fell short of where they were at this time in 2004. Miami-Dade county had a 20.9% decrease.



Palm Beach is the one area not severely affected to date; however, even there, construction of new single-family homes seems to be starting to slow down.



David Dabby, a realtor based out of Coral Gables, summed up the situation: "Regardless of how good market fundamentals are, we're running out of land."



The shrinking availability of undeveloped land will place further strain on a market that is already experiencing extremely high demand for real estate – and, as a result, extremely high prices. As availability of lots really starts to bottom out, expect the market to adapt, with construction of condos and multi-family developments starting to replace that of single-family homes.



Market analysts like Bradley Hunter of Metrostudy intend to watch inventory very carefully for the next few quarters, keeping an eye out for a drop off in occupancy that could signal that the market that is becoming overheated, and may potentially be in danger of decline.