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Zonda's New Home Lot Supply Index (LSI) showed tightened supply year-over-year in most major metropolitan areas in 3Q24 — with 21 of 30 decreasing, the same as last quarter. The LSI is based on the number of single-family vacant developed lots and the rate that those lots are absorbed by housing starts.

NEWPORT BEACH, Calif., Nov. 14, 2024 /PRNewswire-PRWeb/ -- 's New Home Lot Supply Index (LSI) showed tightened supply year-over-year in most major metropolitan areas in 3Q24 — with 21 of 30 decreasing, the same as last quarter. The LSI is based on the number of single-family vacant developed lots and the rate that those lots are absorbed by housing starts.

"While the LSI is still significantly undersupplied nationally, there are green shoots in our third quarter data," said Ali Wolf, chief economist at Zonda. "The national LSI rose 1.8% quarter-over-quarter and loosened in 18 of our select 30 markets compared to 2Q24. In addition, total upcoming lots rose 8.2% from last quarter. Lot supply is the prerequisite for homebuilding."

Select highlights: 

• The New Home LSI came in at 57.7 for 3Q24, representing a 9.7% decrease from 3Q23. The 3Q24 data shows a "significantly undersupplied" market nationally. The market has been "significantly undersupplied" since 2017.
  
  
• Miami tightened the most compared to the same time last year, falling 58% to 11.8 — making it the tightest lot market in the country, followed closely by San Diego. Miami and San Diego have the lowest LSI value on record dating back to 2015. Los Angeles rounds out the top three. These markets have severe geographic and topographical limitations on land and lot development.
  
  
• Markets where land supply loosened the most on a year-over-year basis were led by Charlotte, Orlando, and Jacksonville. In these markets, 3Q starts were mixed compared to this time last year- up 5% in Charlotte, and down 2% in both Orlando and Jacksonville.
  
  
• Four markets are considered slightly undersupplied – Atlanta, Austin, San Antonio, and Dallas. 3Q housing starts increased year-over-year in three of these markets (Austin was the outlier), and VDLs increased in just two (Austin and Dallas).
  
  
• Total upcoming lots (i.e. with expected delivery over the next 12-18 months) for 3Q24 increased 17.4% year-over-year and were up 8.2% from last quarter. Importantly, total upcoming lots are up 21.4% from the recent trough at the end of 2023, and 23.0% higher than the same quarter in 2019.
  
  
• Among total upcoming lots, roadwork (i.e. the last step in lot development) increased the most, up 29.3% from the same period last year. Lots in the excavation stage are up 15.9% year-over-year, while those with equipment on site are up 9.7%.

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Methodology

The Zonda New Home Lot Supply Index (LSI) is built on proprietary, industry-leading data that covers the production new home market across the United States. The index values represent single-family vacant developed lot supply, lots that are ready to be built on, relative to equilibrium. Released quarterly, the New Home LSI provides an unrivaled look into the lot markets across the country, offering a current quarter snapshot as well as insight into the directional trend.

The New Home LSI is calculated based on each markets' specific equilibrium as determined by our team of local experts and historical activity. The comparative current value is adjusted to capture the "true" months of supply figure by applying a greater weight to vacant developed lots in subdivisions with more starts activity. Each index value is associated with a phrase highlighting the current lot supply dynamics. A value of 100, represents perfect equilibrium, while a value of 125 and above equals "Significantly Oversupplied", 115-125 - "Slightly Oversupplied", 85-115 - "Appropriately Supply", 75-85 – "Slightly Undersupplied", and 75 and below – "Significantly Undersupplied."

The foundation of the index is a quarterly release conducted by Zonda. It is necessary to monitor residential lot supply to understand how new home markets may be impacted by the incoming pipeline.

About Zonda

Zonda represents the housing industry's leading provider of rich data and the industry's top advisors for residential real estate development and new home construction. With products and services geared for homebuilders, multifamily developers, lenders, and financial institutions, we provide innovative solutions to maximize opportunities in today's real estate development landscape. To learn more, visit .

For media inquiries or to schedule an interview with Chief Economist Ali Wolf:

Contact: Diane Begin
Email: [email protected]
Phone: 224-836-5615

SOURCE Zonda