Silver Lining to Housing Market Slowdown
The nation’s housing market is slowing down, despite a rise in single-family construction. And that is not all bad news for Volusia County.
According to the latest home construction statistics from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, total housing starts for 2022 were 1.55 million, down 3% from the previous year. Single-family starts were down nearly 11% by multifamily construction rose more than 14% in 2022.
In December single-family starts did post a double-digit gain of more than 11%, but industry experts still see a slowing of the market in 2023.
“Even though single-family starts are up on a monthly basis, permits indicated that the housing market will slow down further in 2023,” aid Jerry Kotner, chairman of the National Association of Home Builders, in a media release. “We expect a sustainable decline for mortgage rates in the second half of this year which should lead to a housing recovery in 2024.”
Eric Olsen, president of the Volusia Building Industry Association and president of Olsen Custom Homes, said a slower housing market will be good for some builders while for others “it’s not going to be what they want” but overall, it will be “kind of positive,” especially in terms of easing the slack in skilled labor and get the workforce side of the business “where it needs to be.”
Olsen said supply issues have improved – though some areas such as appliances and tile roofing materials still present problems.
A slower housing market and easing interest rate hikes are also expected to be a positive for the industry in 2023.
“From a buyer’s standpoint, there is still no better time to buy,” Olsen said, adding that while rising home prices aren’t going away, 2023 won’t be as bad as previous years.
“More are going to go up than go down,” he said of overall housing costs. “But were not going to have the double-digit price increasers, especially as the economy comes back in the fold.”
So far this year, Olsen said the signs are positive.
“We had a slow fourth quarter (of 2022), with a lot of ‘conversation’ but a lot of ‘hesitation,’” he said. “In January the inquiries have just been unbelievable.”
Olsen expects the generally positive news to extend across the Sunshine State.
“Florida is going to do great,” he said. “Florida is going to be in great shape.”