Sarasota metro ranks seventh in the nation for new home construction

Amid the COVID-19 hangover of sluggish supply chains and personnel shortages, Florida remains among the most robust homebuilding states in the country. As the North Port-Sarasota-Bradenton metropolitan statistical area continues to attract new residents seeking a more suitable lifestyle, it ranks seventh among all mid-size MSAs for new home construction.

Researchers at Inspection Support Network analyzed the latest data from the U.S. Census Bureau and Zillow, ranking metro areas according to the number of new housing units authorized per 1,000 existing homes in 2021.

In general, fast-growing states in the Mountain West — Utah, Idaho and Colorado — along with Sun Belt destinations such as Texas and Florida lead the nation in the rate of new housing authorizations relative to existing homes.

Neal Communities Chairman Pat Neal said the demographics of the new residents in the Sarasota area are shifting, and homebuilders are responding.

“At least since June 2022, we have been selling homes to people from New York, Philadelphia and Chicago, as we always do, but in bigger numbers now,” Neal said. “But in 2021 we sold 39 homes to people from California, which we rarely ever do. Our customers, who are younger and more likely to be in their working years than before, have chosen Florida as an alternative destination because of our freedom, the way COVID has been handled here, and the lower tax environment, particularly lower than Illinois and California.”

Although the real estate market in general has shown recent signs of cooling amid inflation and the rise in mortgage rates coinciding with Federal Reserve interest rate hikes, people are still flocking to specific areas of the country, leaving demand high and supply short. With 36.2 new housing units per 1,000 existing homes authorized here, local builders are is responding to the need at a rate nearly triple the 12.5 new units authorized per 1,000 existing homes nationally.

Federal mortgage backer Freddie Mac has estimated a nationwide housing supply shortage of 3.8 million homes, citing in part a decline in single-family home construction — particularly starter homes — since the 1980s. The condition is exacerbated as millennials enter the home-buying market, partially driven by median rents surpassing $2,000 a month nationally for the first time, and as the ability to live anywhere and work remotely has become more the norm than the exception.

Neal said his company’s customers are a reflection of the remote work trend among mid-career families.

“We are selling many more homes to people whose children are in high school or college. We have been selling more bonus rooms than we have ever done before, which serve, I believe, as an office for remote work,” Neal said. “This, of course, is for people whose business address is a digital address for a company based in New York, for example, but whose personal address and real place of residence is in Florida.”

North Port-Sarasota-Bradenton, though, isn’t the fastest-growing home construction MSA among Florida markets. Lakeland-Winter Haven is ranked second nationally, with 43.5 new homes authorized per 1,000 existing, Port St. Lucie is fifth at 37.5 and Ocala sixth at 36.4. Following the local MSA are Cape Coral-Fort Myers in ninth at 33.4 and Naples-Marco Island 12th at 31.0.

Among small MSAs, The Villages leads the nation at 63.5.

Not surprisingly, Florida’s largest MSAs are also highly ranked with Jacksonville leading the way at fourth with 34.6 authorizations per 1,000 existing, followed by Orlando-Kissimmee-Sanford in fifth at 29.0.

“I think this is just the beginning,” Neal said, adding the state will have “a long and successful run of attracting not only people of retirement age, but younger people relocating their work and families to Florida.”