DALLAS-There was “a mix of good and fair news” in the most recent residential permitting report from the US Census Bureau, Axiometrics said Tuesday. The fair news: building permits for November 2013 were down slightly. The good news: permitting remains at its highest level since 2008, and the development picture looks especially bright when it comes to housing starts.
Permits for November measured on a seasonally adjusted annual rate stood at 1,007,000 privately owned housing units, off 3.1% from October’s 1,039,000, the Dallas-based research firm reported. However, the November figure was up 7.9% year-over-year from 933,000 in November 2012. Annual multifamily permitting has averaged 321,000 over the past year.
As for housing starts, November’s seasonally adjusted figure of 1,091,000 represents a 22.7% increase from the prior month. Leading the way on a percentage basis was multifamily starts, up 26% from October to 354,000 units and 38.3% higher Y-O-Y. Some 221,000 apartment units were completed over the 12 months ending in November, while 346,000 units were under construction.
If permitting and starts have seen changes—for the better—over the past year, the makeup of the top 10 metro areas for permitting has not seen anything like the same dynamics. The New York City area led the way for the trailing 12 months as it did a year ago, with 21,018 multifamily units permitted in 12 months, up 55%. It was followed by Houston with 15,774 units; Dallas with 13,423; Austin with 11,370; Los Angeles with 9,649; Seattle with 9,141; Washington, DC, 9,137; Atlanta, 9,133; Miami, 8,126; and Denver, 7,964.
“This list has not changed much in more than a year,” according to Axiometrics. “Twelve months ago, the top seven on the list were the same as they are now but the order has changed slightly, with permitting levels increasing by an average of 16%. Additionally, Atlanta and Miami joined the top 10 earlier in 2013, while Raleigh and Minneapolis fell from the list.”
Among the top 10 metros for permits, the nation’s capital “continues to be a concern” with its annual increase of 13%, according to Axiometrics. This growth is occurring at a time when job gains in the metro area have slowed by 62% Y-O-Y.
Looking specifically at multifamily, Axiometrics cites analysts who predict that construction in the sector will surpass its most recent high point. Some of this build-up in new apartment construction will come from replacement of units that were built in the 1980s, when the historical peak in permitted multifamily units was reached.