New Construction Permits Up After a Slow Start in 2017
Home-building overall stalled in January, but more permits indicate construction will pick up in the months ahead.
Single-family construction rose 1.9 percent in January to a rate of 823,000, up from 808,000 in December, according to the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). Privately-owned construction fell 2.6 percent to a rate of 1,246,000, down from 1,279,000 in December—though 10.5 percent higher than the January 2016 rate of 1,128,000.
There is always a seasonal drop in New Builds, but Arizona home builders have been telling me that a scarcity of sub-contractors has contributed to the slowdown in New Construction around the state. As of the end of 2016, the estimated timeline for construction of a new home was somewhere around 8 months, up considerably from even one year ago. Due to a strengthening economy, demand for new homes is increasing even as builder’s ability to produce is remaining stagnant.
“Today’s reported decline in housing starts and completions weren’t statistically significant, but the big increase in permits was a good sign that we are on track for more much-needed new construction in the months to come,” says Joseph Kirchner, senior economist at realtor.com®. “Numbers for new residential construction in January indicate a shift from multifamily to single-family homes that is clearly evident in completions, but not so in permits and starts, which could suggest it is a mild correction, rather than a trend.
“For the housing market as a whole, this means we are seeing a continuing increase in permitting and starts, but not yet completions,” Kirchner says. “Eventually, the permits will turn to starts and completions—the question is whether this will occur prior to the spring market.”
Permits for privately-owned housing in January rose 4.6 percent from December to a rate of 1,285,000, an 8.2 percent increase from January 2016—movement that lays the groundwork for future construction. Permits for single-family housing, however, fell 2.7 percent to a rate of 808,000. The National Association of Home Builders (NAHB) anticipates a 10 percent increase in single-family construction in 2017, and a 12 percent increase in 2018.
Privately-owned housing completions, at the same time, fell 5.6 percent from December to a rate of 1,047,000, a 0.9 percent decrease from January 2016. Single-family completions rose 4.3 percent to a rate of 800,000.
Starts for buildings with five units or more came to 421,000 in January, while permits came to 446,000 and completions to 244,000.
Very few spec homes exist, but when they do crop up sales are swift.
We have access to a large number of new construction sites and builders, many of which will never appear in MLS. You can perform a local Arizona search here, or contact us and we’ll help you do the legwork: 602-999-0952
The best advice we can give you when scouting out a New Construction home is “Don’t go it alone!” The sales people that work at construction sites and in new build neighborhoods are knowledgeable but they work directly for the developer, NEVER for you. If you visit a new build site alone there will be no one representing you, and if you’ve already given the sales person your name I cannot help you at that particular construction site. Call me first. I offer a discount on the purchase of a new construction home and most importantly, I will represent your best interest, guaranteed and free of charge.
For more information, Call or Text: 602-999-0952
eMail: golfarizona@cox.net
Bill Salvatore / Arizona Elite Properties
Residential Sales, Marketing, and Property Management
Source: U.S. Census Bureau. Reprinted with permission from RISMedia. ©2017. All rights reserved.
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