Apartment construction outpacing single-family homes in NJ
Garden State housing construction permits soared in August, but single-family construction continues to lag, according to the U.S. Census.
The number of permits in August was up 60 percent over July. But economic analyst Patrick O'Keefe of Cohn/Reznick in Roseland says "over 70 percent of all of the approvals were multi-family." The August number of permits was 5.5 percent ahead of the figure in August 2015.
Commenting on the large number of multifamily construction projects, O'Keefe says the reason is those are construction activities where the "green light" authorizes a large number of units to go forward, "whereas, with single family approvals, what we are looking at is a permit that is being pulled to begin construction on a single family detached home."
"When you put that in perspective, in July we actually saw a 600-unit decline in multifamily approvals."
The Census figures show that there was only a very slight increase in construction permits for single-family housing in the month of August.
O'Keefe says August was strong for housing permits. However, "year to date, we are trailing where we were last year." An almost 14 percent drop compared to the first eight months of 2015.
He attributes August numbers to "a trick in the calendar." He says they just as easily could have gotten approved in July or October, and we would still have the same level of activity.
Zooming out from the August numbers, and recognizing that we are still "in the hole" by almost 14 percent for the overall number of housing construction permits versus last year, O'Keefe says "what we are seeing is a deceleration in home building activity from relatively low levels."
Joe Cutter is the afternoon news anchor on New Jersey 101.5.