Single-family residential construction hits pre-recession peak in DC
Amid the aftershocks of the housing collapse of the late 2000s, many builders drastically curtailed their projects to stave off even larger losses. Across the country, rapidly declining property values and housing demand caused investors, builders and designers to wait until brighter days arrived. Although some metros across the city still seem to be waiting for this return to a healthy market, the District seems to have already arrived. Several recent indicators suggest that real estate in Washington, DC, is back in a healthy place - even back to pre-recession peaks in several important categories.
One such sphere is new home construction, typically a reliable sign of an active and improving market. According to The Washington Post, residential construction has been climbing incrementally for years and has recently arrived at levels that suggest pent-up demand and markedly high optimism.
One especially positive sign is that the focus of much of the construction has shifted from multi-family rental units to single-family homes. This suggests that buyers - who were wary of entering the housing market just a few short years ago - are now ready to dive in. As a result, the demand for new building permits has spiked as of late. According to the source, 19,000 building permits were issued in the first eight months of 2012, nearly twice as many as during the same period in 2011 and roughly equivalent from the first eight months of 2006, the peak year.
"The housing market is improving, and there is no reason to think that this will not continue going forward," Patrick Newport, U.S. economist at IHS Global Insight, told the news source.
Much of this building activity is centered around single-family residences. From January 2012 to July 2012, there were nearly 10,000 permits issued for new single-family homes in the DC metro area. However, unlike in the run up to the recession, a great deal of these properties are being built in suburbs of the District, including more distant areas such as Prince William County, Virginia, and Frederick County, Maryland. This could suggest that buyers are confident that the positive trends experienced by areas closer to downtown DC will spread to more distant communities.
As other metrics suggest a strengthening economy in the District - such as low unemployment and a high number of incoming residents - the spike in residential construction shows that these gains have likely contributed to increasing property values and demand throughout the metro area.