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San Diego’s real estate construction industry will experience a “slowdown mode” this year, the economist for the state Building Industry Association said in a report released today. (San Diego data begins on page six.)
The economist, Alan Nevin of MarketPointe Realty Advisors, said the peak for building permits issued — multi-family and single-family combined — was 18,300 units in 2003. Three years later in 2006, that number was one-third lower, at 12,000 permits.
Building permits are used by economists to measure future market activity. In the report, Nevin estimates the county’s permits will number 11,000 this year. The county hasn’t seen the permit rate dip below 11,000 since the mid-1990s, under what Nevin called an “entirely different set of economic conditions.”
From the report:
The real estate construction industry in San Diego County is in a slowdown mode. It is one of two areas in California (the other is Sacramento) that has seen a severe reduction in permit activity, both in multifamily and single-family.
In the report, Nevin offers this as an explanation for the prolonged slump, amid what he calls a “healthy and growing” local economy:
…the basic structure that creates real estate demand is still there, but buyers have adopted a wait-and-see attitude. The local press has been particularly negative about the real estate market and that negativity is having an effect on buying attitudes. The resale market is down about one-third as well and prospective buyers of new homes are concerned about their ability to sell their existing homes at rational prices.
But Nevin admits the slowdown in construction employment and permit activity data will be much slower this year than the years during the housing boom.
In July, I talked to Nevin for a story I was writing about Greg Smith, the county’s assessor/recorder/clerk who often schedules public appearances to assure county homebuyers that the market’s not as bad as they may think.
Here’s a bit from that story:
Alan Nevin, director of economic research for San Diego-based MarketPointe Realty Advisors, has spoken on panels with Smith about these issues. He said he and Smith “travel in the same camp” when it comes to expressing a positive outlook on the market.
“He is definitely an optimist,” Nevin said. “There are a lot of pessimists around, but Greg and I are not two of them.”
Today’s report seems like a bit of a change in tune for Nevin.