Applications to Build Nationally Reach New Highs as Market Struggles With Inventory and Supply Chain

The struggles facing homebuyers in America has been well documented. Markets across the country are facing a lack of inventory not seen in recent memory. Supply chain issues, lack of skilled work, and other problems are causing serious disruptions in the building and construction industries. Prices are rising to astronomical and unachievable levels. In response to these conditions, developers and buyers alike are searching for creative pivots to make their real estate goals a reality.

Builders have been facing huge issues getting projects off the ground and completed. Supply chain issues that are being felt in a variety of industries are hitting construction hard. Building supplies for projects are becoming extremely difficult to procure, and when possible, are often extremely delayed making it nearly impossible to finish projects according to pre-set timelines. Compounding the issue is the lack of skilled or even unskilled workers available to complete projects. These issues are wreaking havoc on the building industry and leading to frustration and postponed developments. Bloomberg reports that new project starts actually grew in December 2021, contrary to what industry insiders expected. Residential project starts grew by  1.4% in December, capping off a year of more growth than was predicted. For the whole year, 2021 saw a 15.6% increase in new project starts - marking the highest growth numbers since 2006! According to Bloomberg Markets analysis, the driving force of these projects and applications to build, which were also up 9.1% in December and a huge 17.2% for the year, has been multi-family units. This indicates that developers seem to have found a work-around for the issues facing the industry. Instead of focusing on single family homes, one unit at a time, they are maximizing the supplies and laborers that they have to build multi-family projects instead.

Homebuyers have been faced with equally challenging circumstances over the past two years. Not only is there virtually no inventory available, but there is huge competition for the minimal properties. In many markets, on top of this, the home prices have risen so high and so fast, that many buyers are simply being priced out of purchasing. A stark example of this reality is what is going on in the Miami market. In December of 2021, the inventory dropped 20.2% from the already slim numbers of November. For the whole year, inventory is down nearly 20%. Buyers are having incredible difficulty finding a property at all. Home prices climbed 15% in December, marking the 17th consecutive month of  increases in the double-digit range. This is happening all over the country. This also explains the jump in building applications. Many buyers are turning to purchasing land and building their own home to deal with the challenges in the buying market.

Where does all of this leave the Florida Keys? Because the Keys are designated an area of critical environmental concern, building is extremely limited in the Keys. You can purchase land for sale in the Florida Keys and apply to build, but with so few building permits issued each year and the buildout rapidly approaching, you may not be able to complete your project. When looking to buy a home in the Fl Keys, it is imperative that you work with a knowledgeable realtor to help you navigate this challenging market.