May 01, 2019
The fact of the matter is, if California’s permitting continues at this rate in the coming months without some drastic increases, 2019 could be the first year since 2009 that housing permit issuance decreases from the prior year.
March 2019 building permits came in hot with a 40% total unit increase compared to February 2019, including a 25% increase in single-family dwelling units and a 63% increase for multifamily – but that’s where the positive news ends.
All housing categories, and even non-residential construction valuation categories, revealed permit decreases of at least 15% compared to March of 2018.
With quarterly California housing statistics now available, we can see that year-to-date numbers are trending down as well. The first three months of 2018 produced 27,440 total single- and multifamily dwelling units, while January through March of 2019 revealed 24,596 total units issued – a 10% decrease from Quarter 1 of last year.
So, what does this mean for 2019 housing unit forecasts? Preliminary 2019 forecasts from CIRB show roughly 124,000 total new units, but in order to reach that, Quarters 2-4 would each need to average an additional 8,500 statewide units on top of the dwelling units already being permitted.
The fact of the matter is, if California’s housing activity continues at this rate in the coming months without some drastic increases, 2019 could be the first year since 2009 that new residential permit issuance decreases from the prior year (Check out CIRB’s historical unit chart here.)
There is a small silver lining: Fortunately, there are certain regions in California which are faring better than others when it comes to year-to-date building permits issued.
Our March “Snapshot of California Homebuilding Report” (purchase here) shows that although the Central Valley, Bay Area and Southern California are all decreasing in housing units issued, Northern California has revealed some notable increases across the board and the Central Coast shows positive multifamily trends year-over-year.
A more detailed look at Q1-2019 is available in the March 2019 California Construction Review, which can be downloaded from the CIRB Online Store.
Email CHF-CIRB@mychf.org for more information on building permit data, custom reports, subscription services and more.