Florida Sees Big Drop in Residential Construction

Staff Report
BRADENTON — When the coronavirus pandemic upended the U.S. economy, many states halted or limited construction work. While real estate development is beginning to resume, recently released data from the U.S. Census Bureau showed an unprecedented drop in residential building permits comparing April of this year to April of 2019. Nationally, there was a 20 percent decline in new housing units authorized by building permits, a drop that represents nearly $4.4 billion in value.

According to the New Residential Construction Report, COVID-19 negatively affected all stages of housing construction, but new building permit authorizations and housing starts fell further than completions of existing projects. At the national level, both new building permits and housing starts decreased to their lowest levels in half a decade.

A dramatic decline in new housing unit authorizations now indicates that there will be a prolonged slowdown in new home construction in the coming months—the average time between permit issue and the start of construction is about 1-2 months. It remains uncertain how long it will take new housing authorizations to reach their pre-COVID levels.

While the construction industry has been hit hard nationally, certain parts of the country have been impacted more than others. The Northeast is experiencing the sharpest drop in residential construction, with a 52.2 percent decline in permits and a 51.8 percent decline in the estimated value represented by those permits comparing April 2020 to April 2019. Construction in the South, on the other hand, only dropped slightly. New housing units authorized by building permits in the South decreased 7.6 percent year-over-year, with a drop in the value of only 5.3 percent.

The analysis found that Florida authorized 12,223 building permits for new residential units in April of 2020, representing a 15.8% decline compared to last year. Here is a summary of the data for Florida:

Change in new residential units authorized by building permits: -15.8%
Units authorized in April 2020: 12,223
Units authorized in April 2019: 14,518
Change in value: $15,742,000

For reference, here are the statistics for the entire United States:

Change in new residential units authorized by building permits: -20.0%
Units authorized in April 2020: 96,900
Units authorized in April 2019: 121,200
Change in value: -$4,358,061,000