Housing permits still stalled
In 2010, builders filed permits to build some 925 units of housing in Fairfield County, a 23 percent decline from the previous year. This comes even as builders statewide registered their first increase in five years, according to data from the Connecticut Department of Economic and Community Development.
With approvals granted also for demolitions of some 375 units of housing, that left the county with a net gain of just above 550 units, according to DECD, assuming all are built as planned.
It was the third straight year of double-digit declines in residential permitting in Fairfield County, leaving permits issued at less than a third of their peak in 2005.
Midway through 2011 the market continues to send mixed signals, with implications for builders and homebuyers and sellers hoping to time a transaction at the optimal moment.
Developers are moving along
Building and Land Technology has detailed plans for the next phase of its booming Harbor Point development in Stamford and Toll Bros. has vowed to get backhoes going in Danbury, where it acquired the stalled Rivington project. In March, Danbury approved permits for nearly 30 new units of housing, easily the highest total in the state in the first quarter.
Some smaller builders are moving ahead as well. In Shelton, the father-son developer team of Tom and Shaun Nettleton is pushing ahead with the second phase of Cranberry Hill Estates, with nine of the first 11 Colonial farmhouse-style houses having been sold from the first phase of construction.
If Toll Bros. is feeling bullish about its prospects in wealthy Fairfield County, it is still feeling the lingering impact of the recession, according to CEO Doug Yearley who spoke in mid-May at a Wells Fargo Securities industrial and construction conference in New York City.
“The spring of ”™11 (feels) very much like the spring of 2010,” Yearley said. “To me, that”™s disappointing ”“ I would have thought five years into this, we would be further along. ”¦ Every January for the past five years, we have anticipated some better times and they have not come.
“Mortgage money for a Toll Bros. homebuyer is plentiful,” he added. “It”™s consumer confidence. People are still scared.”
”˜Contractors have been clobbered”™
While the Connecticut economy added 7,600 jobs in April, the construction sector apparently has yet to rebound despite the onset of the peak season, according to estimates by the Connecticut Department of Labor.
Builders employed just above 50,000 people in Connecticut in April, down more than a 1,000 jobs from March. DOL theorizes the sector received a boost early this year from repair work from severe winter weather that is now largely complete.
Meanwhile in April, contractors nationally were able to pass on only partially the costs of rising petroleum and metals prices, according to an analysis by the Associated General Contractors of America. Whereas the producer price index for all materials increased 7.1 percent over the past year, the price of newly built buildings is up just 1.7 percent on average over that period.
AGC said the cost squeeze, a result of sluggish demand for construction, will push more construction employees and firms out of work unless public officials act promptly to encourage public and private investment, itself a dicey proposition given strains on federal, state and local budgets.
“Contractors have been clobbered for several months by double-digit price hikes for diesel fuel, copper and steel products,” said Ken Simonson, the association”™s chief economist, in a prepared statement. “Worse, the price squeeze is hitting many contractors while private demand remains weak, public demand is shrinking and the amount they earn for most publicly funded projects is about to be drastically cut.”