It is estimated that 70% of the jobs created the last 5 years, during this speculative mania, were REIC related. Any decrease in these jobs via layoffs in the construction business or realtors/mortgage offices will only add to the coming pain.
News from Howdy Miller on the sharp decrease in building permits. I have the pdf file, however, I am unable to load here. If you are interested please email me and I will forward to you.
From the Bakersfield Californian:
Building permits hit 7-year low
BY VANESSA GREGORY
Thursday, May 3 2007 6:30 PM
In another sign of a stalling real estate market, the number of permits issued to build new homes in Bakersfield dipped to its lowest point in seven years during the first quarter of 2007, according to a report prepared by Howdy Miller of Ticor Title.
The city issued 689 new home construction permits to builders from January through March, compared with 1,380 during the first quarter of last year and 1,269 -- a record high -- during the same time period in 2005.
Halted construction in Bakersfield and Kern County mirrors a larger pattern. Nationally, building permits fell by 25.9 percent in March from the same month in 2006, according to the U.S. Census Bureau.
Locally, an excess of available homes, high land prices and investor speculation during the real estate boom of recent years combined to sideline small builders and cause large developers to scale back building plans, Miller said.
KB Home, a national builder with a large Bakersfield presence, canceled a planned subdivision last year because of high land costs.
In the construction community, local businesses may already be feeling the impact of less building activity.
Corky Martinez, owner of C. Martinez Concrete, didn't need to see a tally of building permits to know construction had slowed.
"After the first of the year, it didn't slow down," Martinez said. "It just shut down."
Thursday, May 03, 2007
Building permits crumble.
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7 comments:
The city issued 689 new home construction permits to builders from January through March
Ummm.... don't take it the wrong way, but it doesn't much matter if it drops a lot from there (knowing the peak was *almost* twice that). Needing 50% less labor... ouch.
One of my coworkers who worked his way up through the ranks has quite a few friends in the groups getting first hit by the downturn. Its scary. He knows more than a few people whom have already lost their home.
By the time the "elite" realize there is a problem, this roller coaster will be going downhill,fast.
Got popcorn?
Neil
ps
Regular reader, rare poster. Appreciate the info you provide.
Why are we just sitting here smg and cocksure while the MSM stares slack jawwed like this was unexpected. Completely understandable in the context of tthe building cycle.
Corky Martinez, owner of C. Martinez Concrete, didn't need to see a tally of building permits to know construction had slowed.
"After the first of the year, it didn't slow down," Martinez said. "It just shut down."
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Great, now I can finally have that concrete border pored after years of waiting in line behind the homebuilders! Same goes for woodwork and tiling...
Thanks Neil!
Rob-
How many times did we discuss exactly what is happening? Too many to count.
Next small and mid-size builders will start going belly up and the MSM will wonder how this could happen...
Bakersfield_bubble,
Yes, "we" called it. Ummm, the people that got it wrong have been drawing salaries for the last 18 months and we've actually sometimes done a little of the opposite.
I think the medium sized builders will hold out longer. Remember they have deep access to the debt stream and that will hold them up longer only to crash them harder.
New blog resumes the First NLC saga:
http://lastnlc.blogspot.com/
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