New Construction cracks
$1.5 billion in 2005, another record and no slowdown in sight
The
value of new construction in Volusia County last year surpassed $1.5
billion, another record. And the 6,891 housing starts accounted for
81 percent of the total, according to figures compiled by the
Volusia County Department of Economic Development.
"In the
last five weeks of 2005, we did an analysis to see if the housing
boom of the last five years was slowing -- and we did not find it,"
said Volusia County Property Appraiser Morgan Gilreath. "There have
been reports of a future slowdown, but I've always said it's a
strong market."
Unincorporated Volusia County led all jurisdictions in the number of
new homes permitted during 2005. Volusia County’s building permit
office issued 1,680 residential permits worth $222.9 million during
the year. Deltona was second with 1,049 residential permits issued
worth $179.4 million. DeLand issued 642 residential permits
worth $104.4 million while New Smyrna Beach issued 641 residential
permits worth $126.4 million. Countywide the average value of a
residential permit in the fourth quarter of 2005 was $213,454, compared to the average
value of a residential permit in Ponce Inlet which was $378,786.
On the
commercial side, Daytona Beach topped all jurisdictions by a wide
margin. Daytona Beach issued 70 commercial permits worth $99.29
million. Unincorporated Volusia was second with 34 commercial
permits issued worth $33.6 million. DeLand issued 24 commercial
permits worth $20.7 million.
Look at
the real estate picture across the nation, home sales are expected
to ease back to 2004 levels, according to Dave Seiders, chief
economist for the National Association of Home Builders. There will
be a "systemic simmering-down process," Seiders said. He predicted
housing prices nationally will begin leveling off from an average
appreciation rate of more than 10 percent in 2005 to about 6 percent
this year.
In a
December 2005 report from the Office of Federal Housing Enterprise
Oversight, the metropolitan statistical area encompassing Volusia
County ranked 16th in the nation for home value appreciation, with
an average increase of 26.6 percent. The average home appreciation
nationwide was 12 percent for the same period.
Volusia County population growth is a major factor in the
construction boom. The Daytona Beach News-Journal recently reported
that from 2000 - 2004 (the last year for which census figures are
available), Volusia's population grew 8 percent to 478,670.
Homes
are selling before they're built, Gilreath said. As a result, the
area real estate market is robust enough to withstand a slight
interest rate increase or other national changes.
"In
Central Florida, we have a product that everyone wants," Gilreath
said. "So we don't react as sharply to changes in the national
economy as other parts of the country."
As one
example, Gilreath said local lending has not paralleled national
trends of a slowdown. When the Volusia County market reaches
saturation, banks may slow lending, but this hasn't happened yet. "I
have not heard of those same lending trends affecting our area," he
said.
Looking
ahead, Volusia County may experience a bit of a slowdown, but demand
will continue. "We may see a rate of increase at 15 percent, instead
of at 20 percent," Gilreath said. "But that's still more of an
increase than we've seen in the past. People are buying in Volusia
County, and I don't see that changing in the near future."
