Home building rates are starting to improve, but the Renton housing market can expect a slow recovery as the economy is still weak.
Renton housing permits, which peaked in 2007 at just under 28,000, haven’t made it back to half that level, said City Administrator Jay Covington.
"If you'll remember it was about March, and a door just shut,” he said of permits in 2008.
This year, about 12,000 permits were granted, he said.
"It's going to be a long, slow climb out of the housing market," Covington said.
Seattle economist Doug Pedersen also sees slow improvement, noting that the real estate market has to improve before housing starts follow suit.
Pedersen to Renton City Council members this week.
Regional housing permits declined to the lowest point in 2009, but are expected to grow over the next five or six years, and the housing recovery is “expected to take a long time,” he said.
According to the Case-Schiller Home Price Index, Seattle falls below the 20-city composite. The average home price in the Puget Sound is down 7.5 percent for the first quarter of 2011, and these numbers are largely affected by distressed sales.
The state’s Economic and Revenue Forecast Council also predicts a slow recovery in housing and construction. In its September report (pp. 25-26 of the attached PDF), the council wrote, “Single-family construction in Washington is in competition with a stream of foreclosures so it will likely stay weak for some time.” But it noted that multi-family construction has been relatively strong, as rental demand has increased.
Referring to the Case-Schiller data, the council noted: “Over the last year, Seattle area prices have fallen 6.4% compared to the 4.6% decline in the U.S. 20-city index. Foreclosures continue to put downward pressure on prices. It appears both Seattle and the nation have further to drop before home prices stabilize. We are unlikely to see a strong recovery in housing construction until home prices begin rising again.”