Zonda’s New Home Lot Sales Index came in at 55.1 for the fourth quarter of 2020, down 11.6% from the third quarter and 20.4% year over year.
Out of the 30 select markets in the index, lot supply tightened in 28 markets on a year-over-year basis in Q4 2020. The exceptions are Sacramento, California, where lot supply rose 1% YOY, and Boise, Idaho, where lot supply rose 9% YOY. All 30 markets came in at index values under 75, considered “critically undersupplied.”
“The housing market is firing on all cylinders, from engaged shoppers to nearly 15-year highs for home sales and a hot land market,” says Ali Wolf, Zonda chief economist. “Lot inventory tells us about supply and demand dynamics, and today there is a seller’s market. Land is one of the hottest commodities around.”
Baltimore leads the list of markets most impacted with a -48.5% drop in lot supply year over year, followed by San Diego at -44% and Nashville, Tennessee, at -40.3%. According to the report, Baltimore’s inventory drop is due to growth moratoriums and parts of the market that are close to build-out. San Diego is subject to geographic barriers despite strong lot demand, while topography issues affect availability in Nashville’s presently thriving housing market.
Zonda’s New Home Pending Sales Index names Jacksonville, Florida; Raleigh, North Carolina; and Atlanta the top markets for new-home sales in early 2021. The New Home Lot Sales Index captures a 12% drop in finished lots for Jacksonville, 28% for Raleigh, and 28% for Atlanta on a year-over-year basis.
