Housing hits a 10-year low

The county issued 4,723 single-family permits in 2006. So far this year, 1,886.

By CHUIN-WEI YAP, Times Staff Writer
Published December 16, 2007

Pasco's residential market is set to end 2007 with its worst performance in 10 years.

As of the end of November, the county has issued 1,886 single-family housing permits, a bellwether indicator in Pasco's residential market.

Barring an unexpected surge in December, that indicator is not likely to breach the previous low set in 1997, which saw 2,191 single-family permits.

The slump began last year as speculation, oversupply and shaky mortgages began to unravel a market swollen with runaway prices.

But the decline is even sharper now. In 2006, the county handed out 4,723 single-family permits.

In fact, the county has handed out more permits every year in the last decade, even during periods of time - say, 2001 and 2002 - when the national economy entered recession, which economists define as at least two consecutive quarters of negative growth.

Multifamily home permits are not performing much better in Pasco, but at least are staying slightly above recession levels.

There is a ring of desperation now when developers comment on market prospects.

"I don't think it can really get much worse," said Craig Gallagher, president of Gallagher Family Homes. "We're truly at ground zero. It'll take a little longer, but inventory levels are staying in line, the Tampa Bay area's demographics are still strong and now it's just a matter of burning through the inventory."

Housing inventory across the Tampa Bay area dropped 40 percent compared to September 2006, according to a third-quarter report by Metrostudy, a market analysis firm. The number of finished vacant homes had also fallen nearly 5 percent at the end of the third quarter, compared to the same time last year.

"At the current absorption rate, it will be the fall of 2008 before Tampa Bay reaches supply-demand equilibrium - if the job market does not improve," said Tony Polito, of Metrostudy. "The good news is that builders are building only to demand levels."

But commercial construction in Pasco is holding its own.

By November, Pasco has handed out commercial building permits for projects worth $92-million, slightly edging up from last year's total of $81-million, according to county figures. Commercial construction means stores, offices, banks, professional and retail buildings.

This could explain employment numbers that appear resilient - at least compared with the duration of the housing downturn.

In October, Pasco's labor force stood at 193,065, a small decrease from 194,049 the previous month.

But it is still racking up gains compared to a year ago, when the county had 189,657 in its work force.

Sticking to a growth trend it has set for four straight years, the Tampa metropolitan area added 13,400 more jobs in the year ended September 2007, up 1 percent from the previous year, according to the U.S. Bureau of Labor Statistics.

Federal data suggests there are some 88,000 construction workers in the Tampa Bay area, as of November. That's just 7 percent of the total workforce, which may explain why the residential downturn does not seem to have spilled over into the broader economy yet.

The relative strength of the job market may lead some in the industry to bet on recovery.

The National Association of Realtors last week slightly revised its outlook upward, saying that they expected home sales to reach 5.67-million this year - and that's still the lowest level since 2002.

That's a tiny ray of optimism; last month, the association predicted 5.66-million homes would be sold this year.

Single-family housing permits in Pasco

Year

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 (as of Nov.)

Permits

2,191 2,504 3,032 2,931 3,860 4,786 5,883 6,300 7,252 4,723 1,886

Source: Pasco County Central Permitting

[Last modified December 15, 2007, 20:12:41]