After nearly four consecutive years of inventory challenges created by the pandemic housing boom and high interest rates, the housing market is finally showing signs of recovery. As of this past October, over 25% of the nation’s top markets had more inventory than before the pandemic, compared to just 8% last year.
To put things into perspective, inventory in October 2021 was 53% lower than October 2019 and every major US market had inventory below pre-pandemic levels at that time. While interest rates remain high, inventory is now creeping back to normal. National active listings in October 2024 were down just -21% from October 2019.
This comes as great news for buyers who have been navigating a tumultuous market where many homes would sell before they could be registered as active inventory and competitive bidding wars were creating a major barrier for first-time buyers.
Home prices, which continue to rise nationwide, have experienced weaker or declining growth in markets where inventory has returned to normal. Unsurprisingly, markets where inventory remains limited continue to see the largest spike in prices.
Markets in the northeast and midwest remain the furthest below pre-pandemic levels. On the flip side, a large portion of the markets where inventory has recovered are located across the Sunbelt, where the increasing population has created more demand for new home construction. Inventory in Huntsville, Alabama is 85% higher than pre-pandemic levels. Florida markets also make up 12 of the top 50 markets where inventory levels are rising.
One of the main drivers behind rising inventory is a large increase in new home construction across the Sunbelt, which can be partially attributed to strong homebuilder/developer partnerships in large markets.
While it can take the best homebuilders three years to go from concept to sales on new residential development, these partnerships can drastically reduce the amount of time it takes to transform raw land into thriving communities.
Companies like Jobalia Development Group have been proving the value of this partnership model for several years. Today, Jobalia is partnering with the nation’s top homebuilders to acquire vacant land across Florida, develop infrastructure and utilities, and deliver prime ready-to-build lots back to the builder.
This approach benefits homebuilders in several ways. First, many firms don’t have the experience or skills to efficiently navigate the difficult regulatory environment associated with infrastructure development — and therefore, the process can be expensive and time-consuming for them. By partnering with Jobalia Development Group, homebuilders can focus on what they do best, which is building homes. This enables firms to sustain high levels of production year after year.
By temporarily flipping land to developers, builders can also avoid carrying vacant land on their balance sheets for an extended period of time, which helps reduce risk.
The end result of a strong developer/ building partnership is greater profitability, faster turnaround times, and a higher volume of new homes to meet the demand of Florida’s growing population.
Builder/developer partnerships benefit homebuyers too. Because land developers are better equipped to build communities and work with local governments to plan new schools, hospitals, and amenities, future homeowners benefit by having easy access to essential local amenities.
As this approach to building new communities at scale continues to help resolve inventory challenges across Florida, some wonder if homebuilders across the nation should adopt a similar strategy. Doing so could help accelerate the return to normal inventory levels and a healthy housing market.