Building Permits Issued at Record Pace
Inspired by falling interest rates and a steady stream of new residents, developers are rushing to build so many houses, apartments and condominiums that they may obtain a record 40,000 residential building permits in San Diego County by the end of the year, statistics show.
Figures compiled by the Greater San Diego Chamber of Commerce reveal that 32,183 building permits for residential units were issued to developers through the end of September, a frantic pace that outstrips the boom years of 1971 and 1972, when the county--and particularly the City of San Diego--experienced a sudden spurt in growth.
“It means that a lot of people want to live in San Diego, I guess,” said James Fawcett, an economist with the city’s engineering department. “I think it means the economy is pretty good.
“It means that people decided now (to buy a home) who wanted to move in the past and delayed it. Look at myself. I was in the same house for eight years and I wanted to move. I was waiting for the interest rates to drop. . . . I’m looking around now,” he said.
The number of building permits issued is considered an indicator of how strong the local economy is, chamber and city officials said. The previous record for annual building permits in the county was 1972, when 38,409 residential units were authorized.
Recessions in the intervening years pushed interest rates up on home mortgages, and the number of building permits taken out declined. But the rates on fixed-rate mortgages have dropped to an average of 11.75% from the 13% to 15% levels last year, said Rick Snyder, president of the San Diego Board of Realtors.
The decline in interest rates touched off a rush to build an increasing number of homes to satisfy what developers hope is a pent-up demand for housing.
In the month of September alone, builders received 5,866 permits for homes, apartments and condominiums, a 131% increase from the same month in 1984.
“I think San Diego is, and is expected to be, one of the stronger markets in the country, and this is a sign of it,” said Keith Johnson, executive vice president of the San Diego-based Fieldstone Co., which builds homes. Johnson is also the chairman of the Construction Industry Federation, a local trade group.
“The history of our business is where there is a good market, a number of entrepreneurs will rush into that market,” he said. “If allowed by lending institutions and governmental institutions, they will overbuild the market. I think we’re in a condition of mild overbuilding in residential.”
In San Diego alone, there were 13,777 residential building permits issued through mid-October, statistics indicate. Areas showing the most permit activity have been the northern neighborhoods such as Rancho Bernardo, Rancho Penasquitos and Mira Mesa with 3,913; neighborhoods such as Kearney Mesa and University City with 3,316; and eastern neighborhoods such as Paradise Hills, Encanto and San Carlos with 3,076.
