11.03.2009 | New Home Starts Spike (Source: Orlando Sentinel)

New-home construction for the Orlando region grew by 20 percent in the third quarter compared to the prior nine months, according to a study released Tuesday by Metrostudy real estate research firm.

The pace of construction was still below last year's level but the 1,108 houses started in the third quarter surpassed the 900 that were started in the previous three quarters combined with the most activity in Orange and Seminole counties, said Anthony Crocco, director of Metrostudy's North and Central Florida divisions.

In terms of price ranges, the $150,000-$200,000 segment showed the largest number of housing starts and closing, with 1,281 houses started during the year and 1,529 closed.

"Even though pricing reductions during the past few years have attracted active-adult and move-up buyers, financing is still very hard to come by for all but the most creditworthy," Crocco said.

Price drops swept the new-home market with 44 percent of all single-family housing carrying a base price tag of less than $200,000, which represents about twice the amount of homes in that range a year ago.

"The housing market is stabilizing, as new-home inventories become tighter and resale-home inventories decline," Crocco said. "Unfortunately, distressed housing is still working into the market, and we expect at least another few quarters of high-volume short-sale and foreclosure activity." Short sales are sales of homes for which the lender accepts less than the existing mortgage.

The amount of finished houses and houses under construction dropped 32 percent from a year earlier, leaving the area with a nine-month supply of 4,365 single-family units. Meanwhile the number of completed houses sitting on the market dropped to 2,429 from 3,515 last year.

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