Single Family Building Permits Rebound in June
While permits for new single family housing units decreased 8% nationally and 8.7% in the south region, they rebounded in Alabama during June. Single family permits increased 5.0% year-over-year (Y/Y) from 1,144 in June 2018 to 1,201 in June 2019. Year-to-date (YTD), permits in the state are up 3% while they are down 4% in the south region and 6.5% nationwide. Alabama permit trends are moving against both national and regional trends year-over-year as well as year-to-date.
Permits in Alabama are now up on the year since January 1st thanks, in part, to impressive growth in Huntsville and Mobile’s new construction market. June saw an increase in both of these markets, permits are now up 16.5% YTD in Huntsville and 9.1% in Mobile. The Huntsville metro area leads the state in total permits in 2019, with 1,719 through June, while the Birmingham-Hoover metro area is second with 1,425. This is very impressive when one considers the population estimates for both areas: 455,000 in the Huntsville metro area and 1,130,000 in the Birmingham-Hoover. Additionally, many economic projects are underway, including the Toyota Mazda manufacturing facility that will produce 4,000 plus jobs when production begins in 2021. These strong economic development projects will give added energy to an already strong new construction market as population and job growth continue to trend upwards in the area. Huntsville’s population is estimated to overtake Birmingham within the decade so we can expect permits for new single family housing units in this area to remain strong in the future.
However, the boom in new construction activity in north Alabama is not limited to Huntsville. With a strategic location along the Tennessee River, access to two Class I railroads (Norfolk Southern and CSX), and nearby I-65 it is no surprise that 12 Fortune 500 companies have invested in the Decatur area. While permits slowed in June, dropping 26.7% Y/Y, they are up 40.3% YTD, which leads all metro areas in the state in YTD growth. Moving to the southwest region of the state, Mobile has also experienced a rise in new construction activity as permits are up 9.1% YTD. The Port of Mobile being the only deep-water port in the state of Alabama as well as its access to the Gulf of Mexico makes it an ideal location for container shipping companies and other major corporations to be located.
Other markets in the north Alabama region with significant permit gains include Aniston-Oxford-Jacksonville (up 6.1% YTD) and Gadsden (up 18.5% YTD). As the region’s economy continues to grow and diversify, expect cities in the north Alabama region to continue to lead the state in permit growth rates. Of Alabama’s 12 metropolitan areas, only 3 have YTD permit declines in 2019: Dothan (down 2.7%), Florence-Muscle Shoals (down 2.8%) and Tuscaloosa (down 14.2%).
New Single Family Permits in Alabama’s Metro Areas