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2005 Permits Look Good in Atlanta, Phoenix and Houston
With the Atlanta, Phoenix and Houston-area markets leading the way, single-family home building permits reached a record 1.681 million in 2005, up 4.3% from the previous annual record of 1.613 million set in 2004, according to preliminary year-end figures by the U.S. Census Bureau. Single-family permits have been up for four consecutive years.
The Atlanta metro region topped the nation with 60,950 single-family building permits in 2005, followed by Phoenix with 53,960 permits and the Houston’s 51,130.
“The first three quarters of 2005 produced a record year in terms of volume of sales for our firm, and we are very optimistic about 2006,” said Bobby Lunceford, president of Bob Lunceford Properties, Inc. based in the north metro Atlanta market.
Lunceford noted that his company built 19 homes in 2005, versus 16 in 2004, and that he expects to significantly increase output in the coming year.
“We had a slightly sluggish fourth quarter where we had to carry over inventory into the new year, but we’ve established a construction pace where we believe that sales will support a volume of 30 homes in 2006,” he said.
As for the overall Atlanta market, Lunceford is predicting another solid year, with housing production edging 2-3% below 2005 levels.
Doug Cotter, president of the Greater Atlanta Home Builders Association, is also bullish about the region’s outlook in 2006.
“The niche markets are still doing real well in Atlanta,” he said. “We’ve seen a little bit of a slowdown, but I equate it from going 90 miles an hour with your hair on fire to just going 90 miles per hour,” he said.
Cotter, a builder-developer who is president of Cotter Homes and Cotter Properties and Development, also foresees another solid year for his business. “We built about 50 homes last year in a price range of $400,000-plus, and so far this year, we’ve had our best first quarter ever on the building side.”
“I’m optimistic, yet guarded,” he added. “In Atlanta, just as in many other areas of the country, government regulations are slowing down land development, which will further slow down lot supply.”
Paced by a resurgent energy sector, moderate home appreciation rates and a growing population, Houston continues to be a strong market for home builders, according to Randy Bayer, GMB, president of the Greater Houston Builders Association.
“The west side of Houston in Katy is the energy corridor, home to Shell Oil, BP Amoco, ConocoPhillips and dozens of independent oil companies,” said Bayer, a custom builder and president of Bayer Homes, which constructs homes priced at $600,000 and up. “I am selling most of my houses to executives relocating to the Houston area. The expansion of Interstate 10 and the opening of the Westpark Tollway all the way to the Katy area county line has allowed more people to travel out to the western suburb of Houston.”
Bayer built nine homes last year, up from four in 2004, and expects to construct nine to 12 houses in 2006.
“Houston created 42,500 new jobs in 2005 and we are predicting 50,000 new jobs for the city in 2006,” he said. “For 17 straight years, housing starts in Houston have gone up from the previous year. And appreciation rates remain at a reasonable 5% annually, which keeps the Houston area affordable. Plus, many Hurricane Katrina victims are relocating to the area, helping to boost multifamily occupancy rates and single-family starts.”
On a personal note, Bayer said he recently sold his own home to a Katrina evacuee who has been permanently relocated to Houston and is now working for the U.S. Postal Service.
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2005 Permit Usage |
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Rank |
Metro Area |
Permits* |
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1 |
Atlanta-Sandy Springs-Marietta, Ga. |
60.95 |
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2 |
Phoenix-Mesa-Scottsdale, Ariz. |
53.96 |
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3 |
Houston-Sugar Land-Baytown, Texas |
51.13 |
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4 |
Dallas-Fort Worth-Arlington, Texas |
49.32 |
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5 |
Riverside-San Bernardino-Ontario, Calif. |
45.79 |
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6 |
Chicago-Naperville-Joliet, Ill.-Ind.-Wis. |
36.73 |
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7 |
Las Vegas-Paradise, Nev. |
30.36 |
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8 |
Tampa-St. Petersburg-Clearwater, Fla. |
27.43 |
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9 |
Orlando-Kissimmee, Fla. |
26.52 |
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10 |
Wash.D.C.-Arlington-Alexandria, Va.-Md.-W.Va. |
25.32 |
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11 |
Miami-Fort Lauderdale-Miami Beach, Fla. |
23.08 |
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12 |
Cape Coral-Fort Myers, Fla. |
22.21 |
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13 |
New York-No. New Jersey-Long Island, N.Y.-N.J.-Pa. |
19.99 |
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14 |
Charlotte-Gastonia-Concord, N.C.-S.C. |
19.35 |
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15 |
Jacksonville, Fla. |
18.61 |
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16 |
Seattle-Tacoma-Bellevue, Wash. |
17.70 |
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17 |
Denver-Aurora, Colo. |
17.59 |
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18 |
Minneapolis-St. Paul-Bloomington, Minn.-Wis. |
17.18 |
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19 |
Austin-Round Rock, Texas |
17.08 |
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20 |
Los Angeles-Long Beach-Santa Ana, Calif. |
16.40 |
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21 |
Sacramento-Arden-Arcade-Roseville, Calif. |
15.76 |
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22 |
Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md. |
15.09 |
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23 |
San Antonio, Texas |
14.62 |
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24 |
Nashville-Davidson-Murfreesboro, Tenn. |
14.06 |
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25 |
Raleigh-Cary, N.C. |
13.95
*Thousands |
For a complete listing of 2005 permit usage, provided in Excel format, click here.
 Where Are the Top 100 Metropolitan Areas for 2006?
“HousingEconomics Online,” the online publication from the NAHB Economics Group, is your single source for market analysis, forecasts, housing statistics and more. In-depth analysis, detailed Excel tables and overviews are available for all metro forecasts.
To learn more or subscribe to “HousingEconomics Online”, visit www.housingeconomics.com.
 Attend the Spring Construction Forecast Conference in April
Plan to attend NAHB's Construction Forecast Conference on April 27 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth examination of the economic outlook for the housing industry.
For more information, visit www.nahb.org/cfc.
Give Us Your Perspective on the NAHB Economics Blog
Give your economic perspective on NAHB's economics blog, “Seiders on Housing,” an informal Internet-based forum dealing with economic issues, housing trends, survey research and other topics affecting the housing sector of the economy.
Log onto the blog at http://nahbblog.blogs.com and get direct access to NAHB Chief Economist David Seiders' expert opinions, projections and responses. Then let Seiders know what you think.
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