Las Vegas, one of the hardest-hit cities in the U.S. real estate crash, had the biggest jump in housing starts in the fourth quarter, almost doubling from a year earlier.
Construction of single-family homes surged 96 percent in the Las Vegas metropolitan area, 92 percent in Florida’s Naples-Ft. Myers area and 91 percent in Atlanta, Metrostudy said in a report. The U.S. average was a 47 percent increase, according to the Washington-based research firm’s survey of 84 markets.
Homebuilders are stepping up production to meet demand, which has been increasing amid improving employment, mortgage rates near record lows and tightening supplies of existing properties for sale. Housing starts rose 12 percent in December from the previous month to a 954,000 annual rate, the most since June 2008, the Commerce Department said on Jan. 17.
“There’s a lot of pent-up demand in markets across country that is starting to emerge now,” said Brad Hunter, chief economist of Metrostudy. “The Las Vegas market is coming back, but the percentage gains look astronomical because of low numbers we’ve been seeing up to now.”
Las Vegas and other markets where values collapsed most after the housing bust are attracting investors who are buying discounted single-family homes and converting them into rentals. The 1,426 single-family houses started in the Las Vegas area in the fourth quarter is down from the peak of 7,873 in the third quarter of 2004, according to Metrostudy.
In the fourth quarter, Minneapolis-St. Paul; Denver; Raleigh-Durham, North Carolina; Nashville, Tennessee; and Northern California also were among the top 10 areas for increases in housing starts, Metrostudy said.
Houston had one of the smallest gains, at 27 percent from a year earlier. Still, the area is a major contributor to the nationwide housing recovery, with builders starting 5,303 single-family homes, according to the report.
Metrostudy’s data cover homebuilding in 65 percent of U.S. metropolitan areas. New York, New Jersey and Pennsylvania are among states not included in the report.
Buyer demand for real estate remains choppy. Contracts to purchase previously owned U.S. homes fell 4.3 percent in December after a revised 1.6 percent increase in the previous month, the National Association of Realtors reported today.