Metro New Home Starts Post Back-to-Back Monthly Gains

March 24, 2009 - (RealEstateRama) — Despite historically low housing starts for February, home builders did see a glimmer of hope with the housing industry posting a 3 percent gain in new-home permits. A seasonally adjusted total of 156 single-family homes were permitted in February, up from a revised total of 152 homes in January, according to statistics compiled by the Home Builders Association of Greater Kansas City (HBA). That marked the first time since last summer that the housing industry posted positive gains in consecutive months.

Since December, home-building starts are up 17 percent on a seasonally adjusted basis. Despite those gains, February’s permit totals were the lowest for the month since February 1982, tying that month for the lowest February on record since the HBA began tracking permits in the late 1970s.

The slowdown in construction has not impacted all locations equally. While metro new-home permits are down about 50 percent from the same time a year ago, some areas are holding their own or on the rise. Kansas City, Mo., has seen only a 37 percent decline, led primarily by new starts north of the river. On the Kansas side of the state line, cities such as Gardner, Leavenworth and Osawatomie have seen an increase in starts from a year ago.

While the slowdown in the housing market is certainly a major factor in the slump many cities are facing, changing consumer demand and the availability of housing choices is another critical issue, according to HBA Executive Vice President/CEO Tim Underwood. Much has been made about the sluggish start to 2009 for Johnson County, which trails Clay County in total new-home permits, and has seen some of its largest cities post well below normal permit numbers. Underwood said a lack of choices is a key cause.

He pointed toward a study released last week on housing in Overland Park that illustrated the older, northern area of the city has a wide range of housing choices. Yet there is a major lack of affordable options on the city’s south side where the vast majority of the cities’ new homes are being built.

“It’s not a coincidence that communities with a healthy mix of prices are fairing better than others during this slowdown,” Underwood said. “The average new home price in Johnson County last year was more than $400,000. That’s an indication that upper-bracket buyers are continuing to buy new homes even in the current market. But the rise in average prices metro wide is an sign that we’re not doing enough to provide choices for buyers at more affordable price points. For the housing market to recover, we’re going to need more affordable opportunities for local families.”

Kansas City, Mo., led the list of top-permitting cities through February with 76 single-family home permits. Olathe ranked second with 26 units, followed by Kansas City, Kan./Wyandotte County with 17 and Gardner with 16. Rounding out the top ten were Overland Park and Shawnee tied with eight; Leavenworth and Platte County, tied with seven; Osawatomie, six and Raymore, five.

The Home Builders Association of Greater Kansas City (HBA) is the voice of the housing industry and the source for housing information. Comprising more than 1,000 member companies, the HBA represents an industry that contributes more than $2.5 billion to the Kansas City economy and supports more than 36,000 jobs in the Greater Kansas City metropolitan area

Tagged as: HBA, home builders

 

 

 

 

USGBC - U.S. Green Building Council

HUD - U.S. Department of Housing and Urban Development

NAR - National Association of REALTOR

RealtyTrac

FHFA - Federal Housing Finance Agency

Freddie Mac

MBA - Mortgage Bankers Association