More not-so-great economic news for the St. Louis region today.
The Home Builders Association of St. Louis and Eastern Missouri released its data on the number of permits issued by the six counties (St. Louis, St. Charles, Lincoln, Warren and Franklin) and the city of St. Louis. They show that builders were looking to start construction on just 120 new single-family homes in January 2011. That's down more than 40 percent from January 2010, and is the lowest monthly total since November of 2008.
Lincoln County's numbers fell the most precipitously - there was not a single permit sought for a new one-family home in January. In St. Charles, permitting fell by half.
The numbers ticked up slightly at the start of 2010, says St. Louis University economics professor Jack Strauss - but that was driven by a false sense of optimism.
"People thought the crisis was over, and housing prices would start to gradually rebound," he says. "What has appeared more likely, however, is that housing prices unfortunately in this area are going to continue to stagnate, and so once people realized that there would not be a rebound, the market fell back again."
Though construction is big business in the area (a 2004 study found that five new subdivisions in the St. Louis area generated $13.9 million in total net profit for the area governments), local real estate agents say the drop in permitting isn't bad news.
New homes drain the value of properties already on the market and the occupied ones around them, says realtor Jamie Leonard, the director of sales with the Kelsey Cottrell Realty Group.
"It’s going to lower housing values until not only the short sales and foreclosures that we’re dealing with start to sell and ownership comes back around and employment rates get higher," he says.
Jack Strauss says housing will rebound when employment does - but he has no idea when that will happen.