Local New-Home Permits Jump to Highest Mark in One Year

December 22, 2009 – (RealEstateRama) — Metro Kansas City single-family construction permits rose 8 percent in November to their highest level since November 2008, according to statistics compiled by the Home Builders Association of Greater Kansas City (HBA). The organization tracked a seasonally adjusted total of 214 single-family homes permitted in November, up from a revised total of 199 units started in October

Paired with new statistics from the Kansas City Regional Association of Realtors showing new-home sales soared 45 percent in November compared to the same time a year ago, the new-home market posted its best month of 2009. Those numbers give encouragement to home builders who anticipate that the recent expansion and extension of the homebuyer tax credit will help improve consumer confidence in the housing market. The original first-time buyer tax credit was set to expire at the end of November before Congress moved to extend and enhance the credit.

“November’s numbers are a clear indication that the tax credit is working and providing great opportunities for consumers to return to the housing market,” said George Schluter, HBA interim general manager. “The extension of the tax credit through April and the expansion to allow some current homeowners to benefit from the credit should help the housing market continue building momentum. The overall economy will not improve until we stabilize the housing market and begin moving in the right direction.

The $8,000 first-time buyer tax credit passed by Congress earlier this year has been extended until April 30, 2010. The credit has also been modified to accommodate new-home construction schedules, allowing buyers who have signed contracts by the end of April until June 30 to close the sale. Homebuyers who have not owned a home during the last three years may qualify for the credit.

The expansion of the credit provides some existing home buyers to qualify for a credit of $6,500 towards the purchase of new home. Buyers who have owned the same principle residence for at least five years out of the last eight years may qualify for the credit.

November’s robust sales also led to a further decline in new-home inventories. The number of new-home listings fell to 2,091 homes in November. That’s the fewest number of new homes on the market in Kansas City during the last decade and a sharp decline from peak of 5,792 homes listed for sale in September 2006. The monthly supply of inventory fell from 10.9 months to 10.2 months in November, the lowest level in more than two years.

“The decline in new home inventories is leading to opportunities for home builders to get back into the market and put people back to work,” said George Schluter, HBA interim general manager. “That’s an encouraging sign for the local economy heading into 2010.”

Kansas City, Mo., led the list of top-permitting cities through November with 486 single-family homes permitted. Olathe ranked second with 266 units, followed by Overland Park with 114 and Lee’s Summit with 103. Rounding out the top ten were Kansas City, Kan./Wyandotte County with 88 homes; Platte County, 73; Gardner, 72; Leavenworth 69; Blue Springs, 47; and Shawnee, 46.

The Home Builders Association of Greater Kansas City (HBA) is the voice of the housing industry and the source for housing information. Comprising approximately 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.

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