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New Construction Still Languishing in Florida Due to Foreclosures

On Behalf of | Sep 2, 2010 | Firm News, Home Foreclosure

New home construction continues to trot along at a snail’s pace throughout Florida as our state attempts to recover from the real estate market collapse. A mere 72 permits for single-family homes were pulled by contractors in Lee County in August, down from 90 in the prior month. Most of this activity, albeit minimal activity is due to developers buying up groups of empty lots within existing neighborhoods that had been planned to be built out until the prior developer went bankrupt once people stopped buying new houses in the midst of the crash.

Many are finding that new home construction isn’t the most frugal option in Florida these days. There are just too many people that were forced to foreclose on their mortgages in recent years. Though many of these individuals likely found debt relief through bankruptcy, Florida’s housing market was not so lucky. With so many banks looking to unload these foreclosed properties at a cut rate, it doesn’t make a lot of sense for people to invest in building new homes if their home value will immediately drop below what they must pay to have it built.

Multiunit construction is also languishing in Lee County. No permits were issued for multifamily units this past month, comparable to 10 in August of 2009. Commercial construction seems to be leading the way for a positive trend. 22 permits were issued for new commercial buildings at a collective value of $4.6 million, compared to $1.4 million in the prior month, and $1.9 million a year ago, August.

More investment in construction means more work and more local jobs. More people earning money equals more people spending money within our local economy. This puts the citizens of Florida in a better financial position all around.

Source: “Residential permits go even lower” 9/2/10

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