Permits for New Homes on the Rise
Permits for new homes on the rise By Brook Stockberger/Sun-News Business Editor LAS CRUCES The building industry in Las Cruces is starting to pick up some momentum.
Posted: 06/16/2009 12:00:00 AM MD
According to the monthly building permit report issued by the city of Las Cruces, 71 permits were issued in May for new residential construction. That marked the best month on record for the past 13 months, since April of 2008 when 80 such permits were issued.
As for total valuation, it has been even longer since Las Cruces experienced a month as good as May. The $12.1 million in total valuation for the new residential construction permits mark the best month since July 2007 when the total was nearly $12.9 million.
While the numbers are still off pace from the hot growth of several years ago in 2006, 125 new residential permits were issued in May for a total valuation of more than $17 million there is hope this is a sign of more improvement to come.
“Things are happening and people are building,” said JB Stearns, owner of Stearns Custom Homes and president of the Building Industry Association of Southern New Mexico. He said people appear to sense that the economy will recover.
“I think (the economy) is a huge part of it,” Stearns said. “The fear factor is not as strong … (people hope) we’re done sliding and maybe we’ve got a little toe hold.”
Chris Erickson, who teaches economics and international business at New Mexico State University, said that a decline in home prices, “may be inducing people to begin to buy.
“The fact that our real estate market wasn’t as far down (as other places in the country), means that a drop in the prices could have a bigger effect,” he said.
Justin Harper, president and CEO of Citizens Bank, said the number of people seeking financing to buy a new home has picked up.
“We’ve seen an increase over the last couple of months,” Harper said. “Mostly in the 150 to 210 (thousand dollar) range. That market is still very active.”
John Hadley of Desert Star Realty said that some homes still sell at all prices ranges, but “anything under 200 sells like hot cakes.”
Erickson did caution, though, that one month of good permit reports does not equal a recovery. He said news from permits reports can be up one month and down the next.
“This is a positive sign, but one thing to keep in mind is that permits tend to be a noisy series, which means they tend to be unstable” he said.
Erickson said that, if several positive months are strung together, then it can be seen as a positive pattern.
As for the complete permit report, it shows that through the first five months of 2009, a total of 1,110 building permits were issued by the city for a total valuation of nearly $94.9 million. Last year for the same time period, more permits were issued 1,312 but the total valuation was less, at $93.5 million.
Commercial construction was a bright spot last year as permits for new construction and additions/alterations actually rose from 125 in 2007 to 177 in 2008. This year, 61 had been issued through the end of May, off last year’s pace of 88 for the same time period.
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