Building Permits Increase in Massachusetts for the 1st Quarter in 2013
Building permits in Massachusetts are up 21% this quarter compared to the first quarter in 2012.
2,586 building permits were issued in the first quarter of this year compared to 2,145 issued in the same period last year. There were 900 building permits issued in March, the highest amount issued for the month since 2007.
Across the country, building permits for single family homes have been steadily increasing since February 2011 when there were just 379,000 building permits issued.
Even with the increase in building permits housing inventory levels are still very low. The low inventory levels have created increased demand for homes which has triggered bidding wars on homes and affected prices. Home prices in Massachusetts rose for the second month in a row in March. The average selling price for a home was $321,227, up 5.17% compared to March 2012. However, the number of home sales also dropped for the second consecutive month. There were 23% fewer homes for sale in March 2013 compared to March 2012, which contributed to a 1.5% drop in the total number of home sales compared to the same period last year.
In a statement last week, National Association of Realtors chief economist Lawrence Yun, said, “We need a housing supply of over 6 months to have a generally balanced market between home buyers and sellers, but it’s unlikely we’ll get there without greater increases in housing construction.”
The fact that building permits are up is a positive sign for the housing market because new construction not only fuels the economy, it will help increase the inventory of homes for sale once these homes are completed. However, the number of permits this quarter is still 43% fewer permits than the 4,564 building permits issued in Massachusetts for the first quarter of 2005, at the height of the housing boom. While this quarter’s growing numbers are encouraging, they are still way below the levels needed for a more balanced market.
U.S. Census Bureau: Building Permits Survey