The year-end residential construction data for 2017 is in, and the story it tells is encouraging. Single-family building permit data through the end of 2017 showed a 6.1% increase over 2016. Homebuilders don’t pull a building permit unless they are serious about building, so this data is a good indicator of future building activity.
While the national numbers are interesting, you really have to drill down to local metropolitan markets to get a sense of where the market is really at. The old saying, “All business is local” is particularly true in the homebuilding market, as some markets are going gangbusters with new residential construction and others aren’t seeing much of it at all. The activity is super-concentrated in a relatively small number of markets.
Ten metropolitan statistical areas (MSAs) accounted for 17% of the 881,000 single-family permits pulled in 2017: Dallas; Riverside-San Bernardino-Ontario, CA; Tampa-St. Petersburg-Clearwater, FL; Phoenix; Atlanta; San Diego; Austin, TX; Raleigh, NC; Jacksonville, FL; and Los Angeles-Long Beach-Anaheim, CA. As you will see in the chart on the next page (click See Full List link below), 15 markets enjoyed an increase of at least 1,000 permits, with Dallas leading the pack with a 4,364-permit increase. The 100 largest markets out of the 366 MSAs for which the U.S. Census Bureau collected 2017 building permit data accounted for 59% of all building permits in 2017.
At an estimated 19% of sales through electrical distributors, the residential market doesn’t command as much mind share with the typical electrical distributor as the commercial or industrial markets, but at an estimated $20 billion in 2018 sales, according to Electrical Wholesaling’ 2018 Market Planning Guide, it’s not a market to overlook, either.