January 2011 Sees Single-Family Housing Starts Fall

Housing starts September 2008 - August 2010Annualized Single-Family Housing Starts dropped 1 percent in January to 413,000 units nationwide, it’s lowest reading almost 2 years.

A “Housing Start” is defined as a home on which construction has started.

Now, if you had only seen the Housing Starts story in the headlines today, you wouldn’t have known that single-family starts fell at all. It’s because of how the story is being reported.

Most commonly, newspaper headlines are reading something similar to “Housing Starts Jump 14.6%” with the lead paragraph making mention that “housing starts are at their highest levels in 4 years”.

It’s a true statement, but it’s misleading, too.

This is because, despite the Census Bureau reporting Housing Starts by property type — single-family, multi-family, and apartments — the media often lumps them into a single data set.

It’s a categorization that helps investors in home builder stocks, but it does little for everyday Blairsville Home Buyers. The huge majority of buyers aren’t buying multi-units or whole apartment buildings — they’re buying 1-unit homes.

Here’s how January’s Housing Starts broke down by type:

  • Single-Family Homes : Down 4,000 units, or -1%
  • 2-4 Unit Homes : Negligible change
  • Apartment Buildings : Up 46,000 units, or +80%

Clearly, the surge in Housing Starts can be attributed to the rapid rise in the 5-unit-or-more sector. Single-Family Starts were weak, by comparison.

Even with all of this noted, however, we can’t even be certain that the January Housing Starts data is accurate anyway. A footnote in the government’s report shows that, although single-family starts are said to have decreased 1 percent, the data’s margin of error is ±8.6%.

Here on a more local level in the North GA Mountains, permits for new construction homes are down considerably from recent years. Land For Sale in North GA is now becoming more and more sought after by Real Estate Investors looking for great Real Estate Investments. Empty Lots in seemingly abandoned developments are extremely undervalued and prime for purchase. With little increased activity in Vacant Lots and Tracts of Land For Sale, many home builders in Blue Ridge, Blairsville, Hiawassee and Ellijay are hopeful that their services will soon be needed.

Total New Construction Permits Issued In 2010 For Each County Of North Georgia

  • Gilmer – 91
  • Fannin – 123
  • Towns – 54
  • Union – 68

This means that the true Single-Family Housing Starts reading may be anywhere from -9.6% to +7.6%. The data is throw-away. Housing Starts may have actually increased in January, but we won’t know until revisions are offered later this year.

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