Thanks to New Home Trends in Mill Creek, builders and developers in Snohomish County have a new tool to help them decide where they should build their next subdivision or master-planned community.
Company President Todd Britsch publishes the Strategic Examiner quarterly report, providing home building market data for six counties from Thurston to Whatcom. Extensive data gathering and analyzing for the report provides statistics and trends showing new homes, plats, home sales, population growth and overall housing trends.
“The data provides the building industry with insight on where to focus their business and where the market is heading,” he said in an interview after the first Strategic Examiner report was unveiled to an industry crowd at the Master Builders Association in Bellevue last month.
Current through Sept. 30, 2006, the document provides:
• The supply of lots in the pipeline, tallied from the volume of current plats and permits.
• Demand, measured by home sales and projected market growth.
• Economic drivers such as employment rates, population growth and issued building permits.
• Apartment vacancy rates.
• Five-year under-or-oversupply projections based on four economic scenarios.
The material is gathered from multiple sources, including interviews and surveys with industry leaders and government officials, city and county records, site visits and third-party reports.
“We’ve provided supply-and-demand analysis studies in smaller areas, but we’ve never before taken a look at all of the components of the entire Puget Sound for an eight-year period. No one has,” Britsch said.
The idea for the new data series stemmed from a $30,000 study for Barclays North and Frontier Bank, both based in Snohomish County. Britsch and his staff analyzed those eight years of data and projected the number of lot and home supplies for the next five years, comparing anticipated needs to home sales trends.
New Home Trends, co-founded by Britsch’s parents, Mike and Suzanne Britsch, began as an affiliated company called Real Vision Research before it merged to operate simply as New Home Trends.
Based on feedback from the Barclay’s/Frontier study and encouragement from users of its other services, New Home Trends decided to produce the Strategic Examiner four times a year, producing reports with data for all six counties or for each individual county, at a lower cost.
Strategic Examiner is the latest product generated from New Home Trends’ years of experience in data mining, researching, analyzing and consulting services for residential markets in the Puget Sound, Portland, Salem and Boise areas.
At the end of the third quarter of 2006, for instance, the report showed there were 754 plats with 19,950 vacant lots or unsold spec homes on the market in the six counties, an increase of 25 plats and 277 vacant lots or unsold spec homes since June 30, 2006. Based on net new single-family sales from October 2005 to September 2006, this is a 21.5-month supply, up from a 19.8-month supply as of June 30, 2006, according to the report.
Also, the six-county region had 3,889 unsold spec or under construction homes as of Sept. 30, 2006, an increase of 716, or 22.6 percent, over June 30 statistics. That’s a 4.7-month supply, based on net new single-family home sales from October 2005 to September 2006, up from a level of 3.2 months of supply at June 30, 2006.
By looking at different areas, builders can see where the greatest needs are as well as the available supplies of housing on site or in the pipeline. King County, for example, has the largest number of unsold spec or under construction homes, with 1,091 valued at $618 million. Skagit County has the least, with 143 valued at $47 million.
Average list price for unsold spec homes in the six counties was $469,249 at the end of September, down from $479,370 at the end of June. King County had the highest average list price at $668,374, while Skagit County had the lowest at $357,258.
It’s a labor-intensive process but one that New Home Trends is already geared for because of years of producing smaller reports and summaries for the home building market, Britsch said.
He said the report is designed to give builders a day-to-day tool to make better business decisions.
“You watch housing markets twist and turn and see builders who are basing their housing plans on only a few factors. This report could keep people from making mistakes, even making it possible to survive a downturn, because companies are better able to decide where to build, what to build, how to create affordable housing and where the holes are in various markets,” he said.