You're reading...
Market News and Trends

Austin-area building permits — signs of confidence?


There have been some encouraging signs in Austin/Central Texas residential real estate recently (see Signs of Austin-area market progress and Demand for new homes may be picking up …).  Since building permits indicate builders’ and developers’ confidence or lack thereof, this brief summary of permitting activity offers some interesting insights.

To keep this simple, and to avoid getting bogged down in month-to-month variations, I focused on cumulative, year-to-date, permits issued in 2010 and so far in 2011.

This year, new permits for single family homes continue to lag last year — about 5% through May:

Permits are still being issued, and the cumulative total is not falling any farther behind as 2011 progresses, but there is no sign of a surge in confidence in this sector.  It’s also worth noting that the number of single family building permits in the past few years is WAY off the pre-recession peak — down 65% since 2006:

It is a fact that Austin and Central Texas were largely shielded from the effects of the housing downturn in 2007.  Total home sales have certainly declined, but values have held up well and even continued to appreciate.  That was due to a much lower rate of mortgage foreclosures than in most major cities, and because home builders pulled back in the face of weak demand, allowing private home sellers a less competitive environment.

The market for small investment properties — duplexes, triplexes, and fourplexes — is barely breathing:

Yes, that’s just 29 permits issued so far this year — just 1/5 of the YTD total at this time in 2010.  Certainly weak, but not necessarily — or exclusively — driven down by the current recession.  The last real surge in 2-4 Family permitting was in 1981 to 1984.

As I have commented several times in recent months, the housing sector that is really showing the confidence that should result from Austin’s continuing growth in jobs and population is the apartment market.  Permitting activity so far this year bears that out:

So far in 2011 (January through May), new multifamily permits have totaled 94% of the entire 12-month number from 2010!

I don’t expect the 2-to-4 Family sector to make any significant recovery, but the surge in new apartment-building projects is very encouraging, and it is a signal that we can expect renewed confidence in new Single Family home construction — beginning later this year, then gaining real traction as we move toward Spring and Summer of 2012.

About these ads

About BillMorrisRealtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 449 other followers

%d bloggers like this: