By Aaron Mendenhall | Real Estate Daily News
At the end of 2016 we were excited about attaining 2,699 permits and 1,904 single-family house starts for the year. When compared to historical averages of 4,000 to 5,000 permits per year, these numbers seem low. However, it highlights the duration and severity of the recession in Tucson. After bumping around the bottom with around 2,000 permits for several years, a jump to 2,700 permits was a welcome change (a 24% increase from 2015). Last year we had several significant job announcements, which, among other things, seemed to improve everyone’s outlook on the Tucson economy and market strength.
So far in 2017 market optimism has continued as permits surged even higher. We started out the year with 241 permits in January, increased to 254 permits in February and finished March with 299 permits. Permit counts have increased month over month since November. The 794 permits for the quarter is a 27.9% increase over the first quarter in 2016 and a 19% increase from the fourth quarter 2016. Increased permits and house starts means reduced lot inventories. Builders have been cautiously optimistic about the strength of the housing market and have been working hard to fill their pipelines with lots. As existing finished lots are pretty much non-existent in the market, builders have been purchasing both raw land and platted lot subdivisions for the past several years. The rate of new lot development has been increasing and just last year more new lots were developed and introduced than were built upon. These new lots are needed, particularly as the market continues to improve.
