Building Permits Rise as Foreclosures Drop

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IRVINE, CA-In seesaw fashion, the number of single-family building permits in the first quarter rose 27% from a year ago, while foreclosure starts dipped 27% during the same time period, according to RealtyTrac Inc., a locally based online source of real estate and foreclosure data. The firm reports that 19 US markets saw jumps in both building permits and foreclosure starts in Q1, including Western markets Las Vegas and Seattle, based on data provided by HUD.

The rise in single-family building permits brought the number to the highest first-quarter total since 2008, RealtyTrac reports. The majority of total permits issued were for single-family homes, followed by five-plus-unit multifamily properties. Overall, multifamily building permits increased 23% from a year ago.

California was among the states with the most single-family building permits in the first quarters, along with Texas, Florida, North Carolina and Georgia. Each of these states posted double-digit percentage increases from a year ago as well as decreasing foreclosure starts form a year ago, although Florida foreclosure starts were down just 1%.

“Nationwide and in most markets, it appears builders are planning to ramp up activity that will help offset a drop in foreclosure starts,” said Daren Blomquist, VP of RealtyTrac, in a prepared statement. “But there are some markets where a jump in both building permits and foreclosure starts in the first quarter indicate the scales will tip more heavily in favor of supply of homes for sale in the coming months—both new homes and foreclosures. On the other extreme, there are some markets where both building permits and foreclosure starts are down dramatically, indicating that there will be no reprieve from the shortage of homes for sale in those markets in the near future.”

As Globest.com reported last week, Nevada posted the nation's highest state foreclosure rate for the second month in a row in April, despite a 15% monthly decrease in foreclosure activity, according to RealtyTrac. The state reported one in every 360 units with a foreclosure filing during the month—more than twice the national average.

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