Building permit
activity in third quarter continues decline as market levels off
The red hot
building boom of the last two years continued its year-long descent,
according to third quarter building permit data collected from the
county and city building permit offices by the Volusia County
Department of Economic Development.
Building officials call this year a leveling off from 2004 and 2005,
where records were
smashed for the number of home permits issued and the dollar value
of new construction.
The downturn
in the number of commercial and residential permits during the third
quarter this year is an expected cyclical adjustment, according to
Sue Darden, executive director of the Volusia Homebuilders
Association.
“We are where
we were three or four years ago, and those were really good years,”
she said. “The boom years since that time have been based on a lot
of investment.”
According to
third quarter building activity reports, residential permits dropped
in value from the second quarter’s $238.8 million to $144.4 million
in the third quarter, a drop of 39 percent. Commercial activity fell
to $54.1 million from the $71.3 million in permits issued during the
second quarter this year, a decline of 24 percent.
Darden said
local housing prices have stabilized after the increases of the past
couple of years. “With higher land and labor costs, along with
impact fees, there is not much wiggle room for builders.”
She also
pointed out that some production builders are offering perks – one
sure sign of a slowdown. “There have been layoffs. But it’s all part
of the cycle. It will change again. I hear from our members they
expect a pickup in the first quarter of 2007.”
Clay Ervin,
planning director for Ormond Beach, said his city is looking for new
opportunities in the residential market.
“We only have
so much land available, and we are nearing build-out. That’s why we
are looking to projects such as Ormond Crossing as a better
opportunity for growth.”
Ormond
Crossing, on both sides of I-95 and south of the FEC railroad
tracks, is a mixed-use development that will feature 3,700 single
family and multifamily units and 5.1 million square feet of
industrial, office, warehouse, distribution and retail space.
“We are seeing
the light at the end of the tunnel on the planning for this
project,” Ervin said. “Hopefully, ground will be broken in the next
year or so.”
A slowdown in
the number of local residences built will translate into a
corresponding decrease in retail use, and Volusia County’s
commercial market still is playing catch up, according to market
analysts.
“You will see
the amount of new commercial and office development slow, and you
also will see leases and new business startups slow,” Ervin
predicted. “The critical question is ‘How slow will it get?’ But
once we hit bottom, buying will start all over again. It’s the
standard building cycle.”
In DeLand,
residential permits increased from $24 million in the second quarter
to $28 million in the third quarter. “We weren’t meeting our goals
on permit issuance and our review times were taking too long, so we
worked overtime and worked through a backlog,” said Building
Official Dale Arrington. But she added there has been a slowdown in
the residential market. “People are saying we probably will remain
slow for a little while.”
Commercial
projects in Ormond Beach include Root Commerce Park on U.S. 1,
primarily an industrial space, and Ormond Commerce Park by Vanacore
Development, also on U.S. 1.
 Ervin
said the Root Commerce Park project will be moving forward for
development approval soon, while the first part of the Vanacore
project is complete. A new retail
office center by Holub Development on Hand Avenue is nearing
completion and will be open soon.
Commercial
development also is vibrant in Port Orange, according to Planning
Director Mike Disher. “We have seen a housing slowdown and a slight
drop in building permits, but we have not seen a drop in terms of
projects coming in for site development.”
Port Orange
has experienced a building boom during the past eight years and the
overall trend is still up, according to Disher. “We have 114
projects under review and construction.
This number
fluctuates slightly from month to month, but it continues to
increase.”
The city’s WalMart project could go to the planning commission in
December and there are significant projects on the horizon.
Port Orange’s
first development of regional impact, which developers are calling
the Pavilion at Port Orange, will be west of I-95 and on the east
side of Williamson Boulevard, Disher said. “This project would allow
up to 550,000 square feet of retail space, developed as a
combination lifestyle center and power strip center. This is an
exciting project, because Port Orange doesn’t have a lot of shopping
for a city our size. This center will be a relief for Port Orange
residents, who no longer will have to drive to Daytona Beach to
shop. They are talking about high-end restaurants and a movie
theater.”
The Pavilion
project developers are hoping for the first phase of development to
be completed by 2008, according to Disher.--
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