Housing can be a leading indicator of the direction of the economy. But permits and housing starts are dropping nationwide, and analysts believe this troubling trend is casting a shadow over residential construction.
New data from international real estate search portal Point2 sees permitting activity in Florida on the decline for a second consecutive year, marking a notable -9% decrease compared to the previous year. Point 2 says this slowdown hints at challenges for housing affordability and availability across the state.
Here are the areas where permits fell the most.
Florida issued 193,192 new permits last year, a -9 % decline from the previous year. Notably, permits for buildings with 5+ units registered the highest drop, at -13 %.
Among the state’s four largest metros, Tampa-St. Petersburg saw permits for new homes plunge by -15.24%, followed by Jacksonville with a -12.44% decrease. Moreover, Miami-Fort Lauderdale and Orlando also faced declines of -7.65% and 11% compared to 2022.
Medium metros were not spared with Port St. Lucie witnessing the highest decline (-20.16%) in permits issued, while Palm Bay-Melbourne went against the trend with an even higher increase (24.48%) compared to last year.
The impact of permit declines extended to small metros like Gainesville (-31.59) and Naples (-34.15). However, Crestview-Fort Walton Beach defied the trend with a 35.56% uptick in permit issuance.
In 2023, permits fell for the second year in a row in an overwhelming 70% of all U.S metros. This downward trend was much more pervasive last year compared to 2022, when permitting activity declined in 63% of metros. These numbers can affect future homebuyers in a very real way. Coupled with the fact that developers are also reducing their activity, which means fewer new homes on the market, it could signal even harder times to come.
Last year, just like in 2022, Florida didn’t buck the trend. Although Florida – along with Texas and California – is usually a leader in both permitting activity and new homes, in 2023 both permits and home starts fell in almost all the metros. Florida remains on the podium, with the second most permits issued for new homes, but numbers are dropping fast. And, with the inventory of existing homes for sale already at a very low point, falling permits and housing starts might only add fuel to a fire that could end up burning many people’s homeownership dreams.
