There were 5,135 building permits issued for new single-family homes in the St Louis area during the 12-month period ended June 30, 2021 an increase of 12.91% from the same period a year ago when there were 4,548 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). After all seven counties seeing an increase in building permits from the prior period for the prior 4 months, this month six counties covered in the report saw an increase in building permits from the same period a year ago. Also worth noting is that the 12-month total number of permits dropped slightly in June from May’s 5,201 permits and was also just slightly below April’s 5,138 permits.
In the past couple of days there have been many news reports about new home sales in the U.S. declining and reaching a 14-month low based upon the latest report from the U.S. Census Bureau. As the table below shows, the reports are accurate as new home sales for June 2021 in the U.S. were at a seasonally-adjusted annual rate of 676,000 homes, the lowest annual rate in 14-months and a rate that is 6.6% lower than May and 19.4% lower than June 2020.. However, the good news for us here in the Midwest Region is, the same table shows that for our region new home sales in June 2021 were at a seasonally-adjusted annual rate of 92,000 homes, an increase of 5.7% from the rate for May 2021 and an increase of 7.0% from June 2020. All of the other regions, as well as the U.S. as a whole, saw a decline in annual rate from the month before as well as the year before.
There were 5,201 building permits issued for new single-family homes in the St Louis area during the 12-month period ended May 31, 2021 an increase of 17.19% from the same period a year ago when there were 4,438 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). For the forth month in a row, All seven counties covered in the report saw an increase in building permits from the same period a year ago and with double-digit increases in all counties except Franklin.
There were 5,138 building permits issued for new single-family homes in the St Louis area during the 12-month period ended April 30, 2021 an increase of 13.67% from the same period a year ago when there were 4,520 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). For the forth month in a row, All seven counties covered in the report saw an increase in building permits from the same period a year ago and with double-digit increases for six of the seven counties. Lincoln County, for the fourth consecutive month, saw the largest increase at 53.8% followed by St Louis City at 29.32%.
While lately there’s been a lot of talk about the skyrocketing lumber prices and the impact on the cost of a new home but that’s not the only thing impacting the price of new homes. The National Association of Home Builders (NAHB) recently released the results of its 2021 Land Developer Survey on Regulatory Costswhich, as the detailed table below shows, the average total cost of regulatory items in the price of a new home is $93,870. The NAHB in the same report indicates the average price of a new home is currently $397,300 so the cost of complying with regulatory issues makes up nearly 25%of the price (23.8%) of a new home.
The second table below breaks out the regulatory costs between ground development and home construction and, as it illustrates, the costs are fairly evenly divided between the two with ground development experiencing 10.5% cost for regulatory compliances and construction of the home itself 13.3%.
There were 5,045 building permits issued for new single-family homes in the St Louis area during the 12-month period ended March 31, 2021 an increase of over 10.5% from the same period a year ago when there were 4,564 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). For the forth month in a row, All seven counties covered in the report saw an increase in building permits from the same period a year ago and with double-digit increases for four counties. Lincoln County, for the third consecutive month, saw the largest increase at 60.78% followed by Warren County at 17.61%.
There were a total of 7,863 residential building permits issued in the St Louis MSA during 2020 with 5,719 of this being for single-family homes both of which represent the highest number of building permits issued since 2007. As the table below shows, there were 110 building permits issued for 2-unit buildings, 57 permits for 3-4 unit buildings and nearly 2,000 (1,977) issued for buildings with 5 units or more last year.
We’re not even close to the early 2000’s though…
As the chart below does such a great job of illustrating, even though the number of residential building permits in St Louis has increased significantly from hitting bottom in 2011 as a result of the 2008 housing bubble burst, we are still not close to the levels before the crash. For the 13 years proceeding the housing bubble burst in 2008, the median number of residential building permits issued in the St Louis MSA in a year was 10,381 permits, 81% more than our “record” year last year.
The “New” Trend?
On the bottom chart, there is a red line which represents the linear trend line for single-family building permits, which on a positive note, does show the number of permits issued in the last 4 years or so bucking the downward trend.
Is it any wonder the inventory of homes for sale is so low?
With the inventory of homes for sale remaining at historically low levels for the last couple of years home buyers may be wondering why there aren’t more new homes being built? Actually, in St Louis, new home construction has been increasing at a pretty good rate but it appears more homes can be absorbed by the market than are being built.
The answer to why more homes are not being built is probably the result of many things such as a lack of available ground in areas that are in demand, a shortage of contractors and tradesmen, the complication of, and cost related to regulatory compliance and the ever increasing cost of building materials. The cost of many building materials has increased significantly but lumber prices, which is a major component of a new home in many ways, have just shot into the stratosphere. As the chart below shows, the Producer Price Index for lumber and wood products shot up to 441 in March, an increase of 84% from a year ago.
According the National Association of Home Builders (NAHB) the price increases in lumber have caused the price of an average home to increase by $24,000 since April 2020 just to cover this increased cost.
Producer Price Index by Commodity: Lumber and Wood Products: Softwood Lumber
There were 4,956 building permits issued for new single-family homes in the St Louis area during the 12-month period ended February 28, 2021 an increase of 11.0% from the same period a year ago when there were 4,465 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). For the forth month in a row, All seven counties covered in the report saw an increase in building permits from the same period a year ago and with double-digit increases for four counties. Lincoln County saw the largest increase at 63.64% followed by St Louis County at 14.64%.
St Louis New Home Building Permits – February 2021
There were 4,864 building permits issued for new single-family homes in the St Louis area during the 12-month period ended January 31, 2021, an increase of 9.6% from a year ago when there were 4,438 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). For the second month in a row, Like last month, all seven counties covered in the report saw an increase in building permits during the most recent 12-month period from the prior 12-month period. Lincoln County saw the largest increase at 52.7% followed by Franklin County at 17.69%.
There were 4,816 building permits issued for new single-family homes in the St Louis area during 2020, an increase of 9.11% from 2019 when there were 4,414 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). For the second month in a row, All seven counties covered in the report saw an increase in building permits during 2020 from 2019 and with double-digit increases for four counties. Franklin County saw the largest increase at 19.40% followed by Lincoln County at 13.97%.
St Louis New Home Building Permits – December 2020
There were4,628 building permits issued for new single-family homes in the St Louis area during July, an increase of 9.56% from a year ago when there were 4,224 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). For the second month in a row, Five of the seven counties covered in the report saw an increase in building permits from a year ago with three of them in the double digits. Franklin County saw the largest increase at 25.69% and Lincoln County experienced the largest decrease at 13.97%.
There were 4,573 building permits issued for new single-family homes in the St Louis area during July, an increase of 7.0% from a year ago when there were 4,271 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). For the second month in a row, Franklin County saw the largest percentage increase in building permits from a year ago with an increase of 27.59% from July 2019. St Louis County, which a decrease in permits last month from a year ago, so nearly an 11% increase in July 2020 from July 2019.
There were 4,468 building permits issued for new single-family homes in the St Louis area during June, an increase of 5.9% from a year ago when there were 4,219 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). However, the increase in new home construction activity was not shared equally around the St Louis area as the counties of St Charles, Jefferson, and Franklin all saw double-digit increases while the other four counties saw declines.
There were 4,4,83 building permits issued for new single-family homes in the St Louis area during April, an increase of 4.28% from a year ago when there were 4,299 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). However, the increase in new home construction activity was not shared equally around the St Louis area and, in fact, really only favored St Charles County and Jefferson County again.
Of the seven counties reported on by the St Louis HBA, 5 saw a decline in building permits from a year ago (the same 5 counties as last month) and, like last month, Lincoln County saw the largest decline at over 15%, and St Charles County was the big winner again where the number of new home building permits in March increased nearly 20% from the same month last year.
There were 4,506 building permits issued for new single-family homes in the St Louis area during March, an increase of 4.55% from a year ago when there were 4,310 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri (St Louis HBA). However, the increase in new home construction activity was not shared equally around the St Louis area and, in fact, really only favored St Charles County and Jefferson County.
Of the seven counties reported on by the St Louis HBA, 5 saw a decline in building permits from a year ago with Lincoln County seeing the biggest loss at over 25%, and St Charles County was the big winner where the number of new home building permits in March increased nearly 25% from the same month last year.
Buying a new home can be a great experience but it can also be a daunting one as well. For homeowners that have previously only purchased an existing home, they will quickly find the process is much different. From the number of decisions that must be made, change orders and other financial surprises along the way, it can be a little overwhelming for a buyer. Particularly one that went into the process ill prepared or without proper representation by a buyers agent that is experienced in new construction.
What you need to know BEFORE buying a new home…
For more complete information, you can find my complete new home buying report here but I have highlights of the report below:
The new home construction trend in St. Louis during January slowed just a bit with a total of 4,426 new home permits being issued for the 12-month period ended January 31, 2020, a slight decline of about 1% from a year ago when there were 4,447 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri.
As the table below shows, 5 of the 7 counties covered in the report saw a decline in new home permits from a year ago. Two of the three counties with the most new home activity, St Charles County and Jefferson County, both saw double-digit increases in permit activity from the prior 12-month period.
There were 70,000 new homes sold in the Midwest Region of the United States during 2019, a decline of 7.2% from 2018 when there were 76,000 new homes sold, according to the latest data from the U.S. Census Bureau.
As the table below shows, there were 40,000 new homes for sale in the Mideast at the end of 2019, which translates into roughly a 7 month supply of new homes for sale.
Homes that sold in the 63048 zip code in the last 30 days were on the market an average of just 30 days before selling, making this the fastest sold zip code in the St Louis MSA. The 63048 zip code area in Jefferson County includes the cities of Pevely, Festus and Herculaneum.
Five of the top ten zip codes were in St Louis County, two in Jefferson County and one in the Counties of St Charles, St Louis City and Madison, Il.
St Louis Zip Codes Where Homes Sold The Fastest In Last 30 Days
I’ll concede the fact that not everyone is as much of a data geek as I am and, in fact, a more accurate statement would probably be that most people are not, including the majority of home buyers and sellers. Sure, home buyers and sellers are interested in home prices and what the potential value of the home is they are looking to buy or sell, but most leave the real data analysis to their agent. After all, part of being a professional real estate agent is knowing the market as well as knowing how to research the market and apply market data to their client’s situation.
However, don’t assume all real estate agents are created equal in this regard and that they all know the market as well as they should or do the research they should. There are many great agents that do these things very well but there are a bunch, probably an equal number, if not more, that don’t. Even the agents that do it well are still limited to the data resources they have available to them.
New home construction in St. Louis during October held at about the same trend as September with 4,289 new home permits issued for the 12-month period ended October 31, 2019, a decline of 8.04% from a year ago when there were 4,664 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri. This is about the same as September when the 12-month trend was down 8.05% from the prior 12-month period.
As the table below shows, 4 of the 7 counties covered in the report saw a decline in new home permits from a year ago. This is the same as last month, with the same four counties on the decline. For the 9th month in a row, Franklin County suffered the biggest loss at 41.31%. At the other end of the spectrum, St Charles County had the largest increase at 7.55% and took removed Warren County from the number one slot after Warren County had 9 consecutive months of the highest growth in permits.
New home construction in St. Louis continued its decline, although at a lower rate, with 4,286 new home permits issued for the 12-month period ended September 30, 2019, a decline of 8.05% from a year ago when there were 4,661 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri. This is an improvement from the 12-month period ended August 31, 2019, when the decline was nearly 10% from the year before (9.74%).
As the table below shows, 4 of the 7 counties covered in the report saw a decline in new home permits from a year ago. Franklin County again suffered the biggest loss at 43.82% making it the 8th month in a row Franklin County has seen a loss. At the other end of the spectrum, Warren County again had the largest increase at 22.22% and this marks the 9th month in a row of increases for the county. For only the second time in the past 12-months, St Charles County saw an increase in new home permits issued during the period with a 3.79% increase.
St Louis New Home Building Permits – September 2019
New home construction in St. Louis continues to decline with 4,244 new home permits issued in August 2019 for the St Louis area, a decline of 9.74% from a year ago when there were 4,702 permits issued, according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri.
As the table below shows, 5 of the 7 counties covered in the report saw a decline in new home permits from a year ago. Franklin County has suffered the biggest loss at 44.13% and Warren County has seen the largest increase at 15.57%.
Yesterday, someone shared with me an article that appeared on CBS News online about a couple, Tyler and Elisha Hessel, that discovered the house they purchased had previously been the subject of a meth lab seizure. The home, at 7218 Valley Drive in Barnhart, Missouri, was purchased by the Hessel’s in January of 2018. According to the article, Elisha is expecting a baby and, earlier this year, the results of some standard pregnancy-related tests showed the baby tested positive for amphetamines. This led to the Hessel’s discovering that the home they purchased was on a list of Meth Lab Seizures from a bust back on October 3, 2013. The article goes on to state that the Hessel’s have been forced to move out of the home for health reasons and a Go Fund Me campaign has been set up for them at https://www.gofundme.com/f/support-tyler-and-elisha-hessel.
Meth Labs have been a real problem in Jefferson County
For the 5-county core St Louis housing market, there were 26.047 homes sold during the 12-month period ended August 31, 2019, a decline of 3% from the 12-month trend for the prior month. As the chart (a proprietary product developed by MORE, REALTORS to help keep its agents and clients on top of market conditions) below shows, there were 27,753 homes sold during the 12-month period ended August 31st of 2018, so the current period sales of 26,047 homes represents a 6.1% decrease from the same period a year ago.
St Louis 5-County Core Market – Home Sales Trend – Past 5 Years
For the 12-month period ended May 31, 2019, there were building permits issued for 300 new homes in Jefferson County, a decline of nearly 26% from the prior 12-month period according to the latest data from the Home Builders Association of St. Louis & Eastern Missouri. For the same period, there were permits issued for 758 new homes in St Louis County,a decline of 23.50% from the prior 12-month period.
Warren County saw a double-digit percentage increase in building permits again this period, and the City of St Louis again had an increase.
For the 12-month period ended April 30, 2019, there were building permits issued for 757 new homes in St Louis County,a decline of 22.80% from the prior 12-month period, according to the latest data from the St Louis HBA. As the table below shows, St Charles County saw a decline of 6.38% during the same period. In February of this year, only two counties showed a downward trend in building permits, but in March that grew to 4 counties and for April, 5 of the 7 counties we are reporting on, show a decline in new home building permits. Warren County continues to show growth and an upward trend in new home construction with an increase of 20.07% in building permits during the most recent 12-month period from the prior 12-month period.
For the 12-month period ended March 31, 2019, there were building permits issued for 748 new homes in St Louis County,a decline of 23.60% from the prior 12-month period, according to the latest data from the St Louis HBA. As the table below shows, St Charles County saw a decline of 11.23% during the same period. Last month, those were the only two counties showing a downward trend, but, this month, Franklin County and the City of St Louis have also seen new home construction trend downward. Warren County again showed the greatest upward trend in new home construction with an increase of 23.66% in building permits during the most recent 12-month period from the prior 12-month period.
For the 12-month period ended February 28, 2019, there were building permits issued for 785 new homes in St Louis County,a decline of 21.11% from the prior 12-month period, according to the latest data from the St Louis HBA. As the table below shows, St Charles County saw a decline of 13.05% during the same period however the other counties reported on by the St Louis HBA are all showing increased new home building activity for the period. From a percentage standpoint, Warren County saw the biggest increase at 30.04%.
St Louis New Home Building Permits – February 2019
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