New Residential Construction Activity in Fourth District Metro Areas
Whitaker, Stephan, Economic Trends
The number and value of building permits in the Fourth District show the glimmer of an upturn in local housing markets. This trend is worth watching both for the employment and economic activity it represents, and as an indicator of consumer confidence. From 2000 to 2005, each metropolitan statistical area (MSA) in the Fourth District had a steady or moderately growing annual count of new residential units, and the total value of those units was rising. From 2006 to 2009, both of these metrics plummeted across the region, in step with the national construction slowdown and the economy-wide recession. An upturn in new construction represents consumers' and builders' sense that the regional economy is improving enough to support new houses, condos, and apartments.
The Census Bureau collects counts and valuations of new construction permits issued each month. The data are collected from every municipality that has a permitting process, and they are aggregated at the metropolitan level. The figures reported here cover all residential units, including those intended for rental. The most recent data available are from August 2010. When I refer to a year's data below, it is the sum for the 12 months ending in August of that year.
To put the recent figures in perspective, we can review the past decade's data in detail. From 2000 to 2005, the growing regions of Columbus and Cincinnati issued permits for an average of 14,915 and 12,779 new units annually. The permit requests began to decline before the recession, dropping in both metropolitan areas to below 4,000 units in 2009. The Cleveland and Pittsburgh metropolitan areas, which have similar-sized populations but no population growth, averaged 7,249 and 6,399 units, respectively, between 2000 and 2005. Cleveland experienced a decline of 72 percent and Pittsburgh a decline of 66 percent in their 2009 levels. Permits issued in Akron and Toledo in 2009 were less than one-fifth of the 2000-2005 average, while Lexington managed to reach 40 percent of its earlier level.
In the smaller metro areas, the trends are very similar albeit at lower levels. Youngstown and Canton averaged over 1,200 and 1,100 permits during the early part of the past decade. Their permit numbers in 2009 were down to 17 percent and 29 percent of these averages respectively. Wheeling, Lima, Huntington, Parkersburg, Mansfield, and Erie all issued permits for less than 100 units in 2009. …