City of Pittsburgh Leads Housing Permits But New Housing and Commercial Slowing

Single family housing starts fell more than 39% compared to last year during the first half of 2009. “The buyers’ response to tough market conditions has been strong and builders have responded by keeping new inventory off the street,” said Jeff Burd, President of Tall Timber Group. “It was pretty obvious from the activity levels month to month that much of the slowdown was early in the year, when the fear from last fall’s financial panic was still palpable; however, the spring permits don’t indicate much easing of the uncertainty.”

 During the January through June period 697 permits were issued for single-family detached units, down 39.4% from the same period last year. Attached units also declined, with 614 units started compared to 641 during the first half of 2008.  The overall housing construction market was down 26.8%. 

 “There really isn’t anything upbeat in this market, but the hopeful signs are that the decline has slowed significantly from the first to second quarter,” says Burd.  “And, the one positive trend continues to be the solid demand for living in the city, as Pittsburgh proper lead the region in single-family permits, a first since we began covering the area in 1994.” 

 Non-residential construction was down almost 18% from last year, but contracting volume was up over 75% from the first quarter of 2009.  Contracting during January-June was $1.3 billion, down from $1.58 billion in 2008.  “The pace of bidding is better than you might expect for a recession,” says Burd.  “The pipeline of projects being proposed is improving, with architects and engineers seeing some uptick in the number of proposal requests, however, the pressure on contractors to build backlogs is starting to show in bids.”

 Reduced global demand has dampened the plans for almost all of the big projects slated to start in 2009, and Tall Timber has modified it forecast for non-residential construction for 2009 to $2.4 billion. “Unless the bigger economy begins to grow sooner than it appears it will, I’m not hearing anything to suggest that AK Steel or Allegheny Ludlum will begin until next year” noted Burd. The other large industrial project, USS Clairton Works, has already been shelved.

 The totals listed below represent the number of new housing units for which building permits were issued, excluding mobile homes and elderly care complexes.  The top areas were:

Topmuni2009-2

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