Albemarle County finally released its second quarter building report last week, and, as expected, numbers are way down. Only 266 building permits for new residential housing units were issued in the first six months of 2008, putting this year on pace for the lowest amount of new construction since the Weldon Cooper Center started keeping tabs in 1990.
“I’m not all surprised that it’s lower than historically because the market is tight,” says Jay Willer, vice president of the Blue Ridge Home Builder’s Association. “When markets get tight, all the speculative building naturally slows down whether it’s because of cash flow issues or whether it’s because of not having a custom [home] customer in hand.”
New building permits do not necessarily reflect new housing—just because a permit is issued doesn’t mean that a unit is finished—but they are normally used as an indicator of new housing growth. The lowest number of permits issued in the past 18 years was 569 in 1995. The average over that time period is 807, with the high coming in 2003 with 1,720.
“It may actually turn out to be part of the solution,” says Willer. “If new houses are not coming onto the market while there’s a lot of inventory sitting out there anyway, that will ultimately contribute to bringing supply back in line with the demand. So there’s good news in the market that it may be rebalancing itself in the process.”
The issue is presumably not about the supply of lots. The city and county have approved 17,000 units of new housing since 2000, according to the tabs kept by Jeff Werner of the Piedmont Environmental Council.
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