Home Permits Hold Optimistic Signs for O.C.
Optimists might view it as evidence that the residential real estate slump has, indeed, reached a plateau--and recovery is in sight.
According to year-end statistics released Friday by the Construction Industry Research Board, the dollar amount of building permits issued in 1992 for new housing units in Orange County hovered close to the same level as a year before.
Last year, about $1 billion in building permits were granted for residential construction here, down about $100 million from 1991’s $1.1 billion. The drop from 1990 to 1991 was a more dramatic $300 million. In better days, during the late 1980s, about $2 billion in permits were issued annually.
The total number of permits for the year was 5,956, compared to 6,569 the previous year.
Even the biggest optimist could find little reassurance in the statistics for commercial real estate--which tallied about $570 million worth of building permits in 1992, down 29% from $800 million in 1991. Together those figures don’t match 1988’s $1.6 billion in permits for non-residential construction.
“Residential real estate seems to have bottomed out,” said Ben Bartolotto, research director for the Construction Industry Research Board in Burbank. “We expect to see single-family and multiple-family housing construction edge upward.”
Commercial real estate, however, is a different story. “Non-residential could continue to decline,” Bartolotto said. “It has been more impacted by the credit crunch. And vacancy rates for commercial buildings have remained high, whereas there is still a need for moderately priced homes.”
Adjusting for inflation, Bartolotto said, the 1992 figure for non-residential construction is the lowest since 1967, which also totaled only about $570 million in permits.
Christine Diemer, executive director of the Orange County chapter of the Building Industry Assn., welcomed Bartolotto’s assessment of the residential numbers. “It reflects a feeling that our builders are sensing out there,” she said. “In many respects, we believe we can only go up from here.”
