County Executive  |  Economic Indicators -- Building Permits Post Deceptive Jump
   Albemarle County, Virginia

October 31, 2010     

Quarterly Economic Indicators


The number of building permits issued, and the total dollar value of these permits, offers a decent, but not perfect, forward indication of the quantity and nature of new construction in the County.  On the residential side of the market, the number of building permits issued between FY 10 Q1 and FY 11 Q1 spiked by 376%.  According to the County’s Department of Community Development, however, over 300 of the 381 permits issued in FY 11 Q1 were for two projects only:  Arden Place and Treesdale, which are comprised  mostly of apartments and townhouses.  The relative scarcity of new single family home building permits reflects a market response to the surplus of unsold single family detached inventory in the County’s housing market (see story on Page 3).  The total dollar value of residential permits increased by a more modest 17% between FY 10 Q1 and FY 11 Q1.  On the non-residential side, meanwhile, the dollar value of permits issued jumped by about 111% between FY 10 Q1 and FY 11 Q1.  This spike, again, is misleading since, in the base quarter of FY 10 Q1, the County experienced a very depressed level of non-residential construction.  According to the County Assessor, non-residential capitalization rates have been increasing in recent quarters.  These increases indicate an underlying surplus of commercial property, so the volume of non-residential construction likely will be modest in the coming year. 

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