Mainebiz

V O L . X X V I I N O. X V J U LY 2 6 , 2 0 2 1 24 R E A L E S TAT E / C O N S T R U C T I O N / E N G I N E E R I N G F O C U S M aine has already seen blis- tering home sales and an all-time high median home price of $305,000, but now the shortage of housing is also driving the number of building permits issued to heights not seen in more than a decade. rough May, there were 2,697 building permits issued, according to data collected by the U.S. Census Bureau. At the current pace, there would be 6,468 permits issued this year — surpassing the 5,690 issued in 2007, the last year of a buildup that collapsed with the recession of 2008-09. In 2006, 7,304 permits were issued. "Tight inventory is driving current interest, but so much more. e tight inventory itself reflects the effects of the housing bust of the 2007-09 recession," economist Chuck Lawton told Mainebiz. Consider that in 2008, Maine's median home price was $180,000, with 9,502 homes sold, according to Maine Realtors data. Compare that to last year's feeding frenzy, when Maine saw a surge of transplants from around the country, with a median home price of $256,000 and 19,921 homes sold. e building boom of the early 2000s was driven by demand for small units, condos and multi-family homes, combined with demand from younger workers and 50-plus people looking to downsize, said economist Jim Damicis, a public policy researcher who is senior vice president of Camoin310. Nationwide, the surge in building permits reached a 13-year high, according to the real estate website NeighborWho. Housing starts for single-family homes rose by 14% last year, adding nearly 1 million homes. "e 2020 home-building increase was due to two big factors that were, we believe, both pandemic-related: historically low mortgage interest rates and greater demand to move to new locales in the wake of COVID- 19," says Michael Pugh, an analyst for NeighborWho. Squeezed home market also fueling rise in building permits Buyers increasingly turn to new home construction amid raging real estate market B y P e t e r V a n A l l e n Tight inventory is driving current interest, but so much more. The tight inventory itself reflects the effects of the housing bust of the 2007-09 recession. — Chuck Lawton Economist S O U R C E : U.S. Census S O U R C E : Neighbor Who HOUSING UNITS AUTHORIZED 2021 (THROUGH MAY) STATES WITH THE GREATEST INCREASE IN SINGLE-FAMILY HOME BUILDS, 2020 Maine New England U.S. 1 UNIT 2 UNITS 3–4 UNITS 5+ UNITS 2,211 — 81.98% 116 — 4.30% 28 — 1.04% 342 — 12.68% 9,133 — 56.94% 458 — 2.86% 205 — 1.28% 6,244 — 38.93% 483,878 — 68.10% 12,928 — 1.82% 8,154 — 1.15% 205,552 — 28.93% Percent change from 2019 with number of new 2020 permits Delaware 27.4% — 7,101 2020 PERMITS Arizona 24.4% — 42,277 Nebraska 23.0% — 5,745 North Dakota 22.9% — 2,171 Utah 22.6% — 22,301 Texas 22.6% — 158,242 Maine 20.3% — 4,180 Missouri 19.6% — 13,107 Alabama 19.4% — 17,551 South Dakota 19.2% — 3,726 Kentucky 18.9% — 8,876 Kansas 17.4% — 5,975 North Carolina 17.2% — 50,505 Vermont 16.9% — 1,154 South Carolina 16.7% — 36,226

• Cover