Through the 1Q13, foreclosure starts fell 27% year-over-year while single-family building permits were up by 27%, according to data obtained by RealtyTrac from the Department of Housing and Urban Development. This is the highest first quarterly total for building permits in five years.
The majority of building permits (64%) in the first quarter were for single-family homes, while 33% of the total permits accounted for multifamily properties with at least five housing units.
Overall, multifamily building permits increased 23% from a year ago.
“Nationwide and in most markets, it appears builders are planning to ramp up activity that will help offset a drop in foreclosure starts, but there are some markets where a jump in both building permits and foreclosure starts in the first quarter indicate the scales will tip more heavily in favor of supply of homes for sale in the coming months—both new homes and foreclosures,” said Daren Blomquist, vice president at Irvine, Calif.-based RealtyTrac.
States with the highest amount of single-family building permits in 1Q were Texas, Florida, North Carolina, California and Georgia, which all posted double-digit percentage increases compared to last year. At the same time, all of these states also had decreasing foreclosure starts from a year ago.
Meanwhile, Nevada, Washington, New Jersey, Maryland and New York experienced both an increase in single-family building permits and foreclosure starts on an annual basis during the first three months of the year. Overall, 19 markets had jumps in both of these categories, including Las Vegas, Seattle, Raleigh, N.C., Reno, Nev., and Boca Raton, Fla.
“We are currently experiencing a feeding frenzy in the Reno area for inventory,” said Craig King, chief operating officer of Chase International. “While the increase of foreclosures and building permits will bring some much needed relief in the future it will unfortunately be far from a feast.”