IBJNews

Local home-building activity still slumping

Back to TopCommentsE-mailPrintBookmark and Share

Home-building permits filed in the Indianapolis area fell by more than 20 percent in March compared with the same month last year. But signs show home construction both locally and nationally may be starting to pick up.

In the nine-county metropolitan area, the number of building permits filed last month fell to 372, a decline of 22 percent from March 2010, according to the latest permit data from the Builders Association of Greater Indianapolis.

Home-building activity was flat or down in every county last month except Hancock, where just 20 permits were filed. Only 15 were filed there in the same month last year.

But the 372 building permits in March represent an 80-percent increase from the previous month and the most building permits filed in a single month in the nine-county region in a year, when 476 were filed in March 2010. Building was bolstered then by generous federal tax credits geared mostly toward first-time homebuyers.

Nationally, builders broke ground last month on the most new homes in six months, giving the weak housing market a slight boost at the start of the spring buying season.

National home construction rose 7.2 percent in March from February to a seasonally adjusted 549,000 units, the Commerce Department said Tuesday. Building permits, an indicator of future construction, rose 11.2 percent after hitting a five-decade low in February.

Still, the building pace is far below the 1.2 million units a year that economists consider healthy. And March's improvement came after construction fell in February to its second-lowest level on records dating back more than a half-century.

Millions of foreclosures have forced home prices down. In some cities, prices are half of what they were before the housing market collapsed in 2006 and 2007. And more foreclosures are expected this year. Tight credit has made mortgage loans tough to get. Many would-be buyers who could qualify for loans are reluctant to shop, fearing that prices will fall even further.

A sign of the battered industry is that the number of new homes finished and ready to sell dropped in March to a seasonally adjusted 509,000 units, the lowest level on records dating back to 1968. And the number of homes now under construction has fallen to a four-decade low.

The increase in home construction activity was felt in most regions of the country. It rose 32.3 percent in the Midwest, 27.6 percent in the West and 5.4 percent in the Northeast. Construction fell 3.3 percent in the South.

Most economists expect home prices—and by extension home sales and construction—to slip even further in 2011 before a modest recovery takes hold.

Homebuilders remain pessimistic about the housing market. The National Association of Home Builders says its index of industry sentiment for April fell back down to 16. It had risen modestly in March to 17, after four straight months at 16. Any reading below 50 indicates negative sentiment about the market. The index hasn't been above that level since April 2006.

 

ADVERTISEMENT

  • Totally agree!
    Totally agree!
    The last thing we need is more NEW homes.
  • Not needed
    Right now, home-building should be down. We don't need to keep promoting sprawl by pushing new subdivisions into farmland and further from the central city. Let's invest our home construction in the central city and renovate condos and homes there.

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    Subscribe to IBJ
    1. As I understand it, the idea is to offer police to live in high risk areas in exchange for a housing benefit/subsidy of some kind. This fact means there is a choice for the officer(s) to take the offer and receive the benefit. In terms of mandating living in a community, it is entirely reasonable for employers to mandate public safety officials live in their community. Again, the public safety official has a choice, to live in the area or to take another job.

    2. The free market will seek its own level. If Employers cannot hire a retain good employees in Marion Co they will leave and set up shop in adjacent county. Marion Co already suffers from businesses leaving I would think this would encourage more of the same.

    3. We gotta stop this Senior crime. Perhaps long jail terms for these old boozers is in order. There are times these days (more rather than less) when this state makes me sick.

    4. One option is to redistribute the payroll tax already collected by the State. A greater share could be allocated to the county of the workplace location as opposed to the county of residency. Not a new tax, just re-allocate what is currently collected.

    5. Have to agree with Mal Burgess. The biggest problem is massive family breakdown in these neighborhoods. While there are a lot of similiarities, there is a MASSIVE difference between 46218 and 46219. 46219 is diluted by some stable areas, and that's probably where the officers live. Incentivizing is fine, but don't criticize officers for choosing not to live in these neighbor hoods. They have to have a break from what is arguably one of the highest stress job in the land. And you'll have to give me hard evidence that putting officers there is going to make a significant difference. Solid family units, responsible fathers, siblings with the same fathers, engaged parents, commitment to education, respect for the rule of law and the importance of work/a job. If the families and the schools (and society) will support these, THEN we can make a difference.

    ADVERTISEMENT