Multifamily Housing Permits Up in NJ in October
October was another good month for housing construction in New Jersey, with a surge in issued permits that follows last June's 27-year high for permits in one month.
According to Patrick O'Keefe, director of economic research at CohnReznick in Roseland, almost 2,800 permits for multifamily housing construction were taken out in October. He said not only is New Jersey on track to beat last year's housing construction, but "we should beat last year's multifamily (numbers), and that would probably put us in the ballpark of the largest number of units approved in 55 years."
O'Keefe said this housing is predominantly rental units, with single-family construction permits down almost 7 percent in October.
"Affordability remains a problem in New Jersey," he said. "What we have is a tale of two housing markets. The single-family units, those which are just occupied by an individual family, (are) actually running a little bit behind last year. There is a lot of discipline on the part of builders."
Because of the many obstacles to home purchases that buyers have had to circumvent since the housing collapse, O'Keefe said builders are still reluctant to commit to that type of construction.
"They are not starting units there until they have a contract," he said.
O'Keefe's data indicates that housing prices remain a constraint on overall activity. In New Jersey, the inventory of for-sale housing has declined for four years because of a reluctance of many homeowners to list.
"They do not think they would accept the offers that they get," he said.
But in the multifamily sphere of housing, the state is on a tear, according to O'Keefe.
"We are running 20 percent ahead of last year, and last year was the best on record going back a long time, back to the 1960s," he said, also emphasizing the good news of more construction jobs becoming available. "It doesn't matter whether they are building single-family units or a multifamily building, those are jobs that the state badly needs."