- The Washington Times - Friday, February 15, 2008

New-home sales in the Washington area were down 18 percent last year. That was on top of a 20 percent drop in new-home sales in 2006. After two consecutive years of dramatic decline, 2007 emerges as the worst year for area builders since the 1980s.

  • Click here to see this week’s sales chart (upload pdf)

  • Only 16,500 homes were sold last year, compared to 30,000 in 1999, which was the best year in the past decade for new homes.

    Even when sales are down, builders have to take out construction permits to keep their businesses moving forward. Today’s charts contain data on residential building permits.

  • Click here to see permits chart (uploads pdf)

  • Permit data gives us an idea of what happened last year, but also what to expect in 2008. Multifamily permits, in particular, are taken out well in advance of construction. Permit data does not always line up well with sales data, however, because some issued permits never result in a completed home.

    Looking at the permit data, you’ll see that only one jurisdiction in our area showed an increase in permit activity last year. Montgomery County saw an increase in both single-family and multifamily permits.

    How could this be?

    “It most likely had to do with the Clarksville permit debacle of 2006,” says Susan Matlick, executive vice president of the Maryland National Capital Building Industry Association.

    “There was a dramatic slowdown in the issuing of permits, and things came almost to a stop for a number of months,” she says. “With the very strict growth constraints put in place, projects weren’t going forward. So what you likely are seeing in 2007 are those projects that were treading water in 2006 finally being allowed to go forward.”

    Something else you may notice when you compare 2005 permits to 2007 is how much some Virginia counties fell compared to many Maryland counties.

    “To an extent, the stricter controls on development in Maryland cushion the building industry during periods of slowdown,” Mrs. Matlick says. “Maryland can’t fall as far because the controls in place prevent a free fall, while in Virginia the builders respond more dramatically to shifts in the market.”

    Chris Sicks

    Contact Chris Sicks by e-mail (csicks@gmail.com).

    The metropolitan area includes the Maryland counties of Montgomery, Prince George’s, Anne Arundel, Howard, Charles and Frederick; the Virginia counties of Arlington, Fairfax, Loudoun, Prince William, Spotsylvania and Stafford; the city of Alexandria; and the District.

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