IRVINE, CA—The average job cost per building permit for residential properties increased in 2013 compared to 2012 in 10 out of the 13 US metros analyzed in a new study from locally based RealtyTrac. The average annual change was a 31% increase, but Los Angeles experienced a 42% rise.
Daren Blomquist, VP of RealtyTrac, tells GlobeSt.com, “This research shows that homeowners are regaining confidence in the housing market, no doubt bolstered by rising home prices and regained equity that was lost during the recession. This is translating into homeowners being willing to invest more dollars back into home improvement, which in turn will help raise the value of their homes and the surrounding neighborhoods further. The rising average job cot per building permit also could be an indication that more homeowners are preparing their home to sell and are making the improvements they think will help them get the most out of that sale. And all of this will have a trickle-down effect on the local economy.”
For the analysis, RealtyTrac looked at 13 of the most populated counties across the country with the most robust building-permit data available. The firm looked specifically at the metric of average job cost in dollars for building permits on residential properties, including single-family homes, condos and townhomes.
The biggest annual increases were in Cook County, IL (up 103%); Dallas County, TX (up 91%); Harris County, TX (up 48%); Ramsey County, MN (up 44%); and Los Angeles. The three counties where average job cost per building permit decreased in 2013 compared to 2012 were Maricopa County, AZ (down 14%); Cyuahoga County, OH (down 6%); and Orange County, FL (down 1%).
The average job cost peaked in 2005 in five counties, peaked in 2006 in three counties, peaked in 2010 in two counties and peaked in 2009 in one county, and the average job cost was down 31% on average across the 13 counties.
The average job cost per building permit ranged from a high of more than $87,000 in Kings County, NY, to a low of just over $3,700 in Ramsey County, MN. Other counties among the top-three highest average job costs were Maricopa County, AZ ($48,850); and San Diego County, CA ($40,521). Other counties among the bottom three lowest average job costs were Macomb County, MI ($5,412) and Cuyahoga County, OH ($5,137).
As GlobeSt.com reported in February, the incidence of US home flipping increased 16% in 2013, and average gross profit on flips rose to more than $62,000, according to RealtyTrac. A total of 156,862 single-family homes were flipped last year—defined as a home being purchased and subsequently sold again within six months—up 116% from 2011.