New Residential Construction Outlook 2014
First Quarter 2014
New residential construction, one of the leading economic predictors of the U.S. economy and real estate market, grew over 16% in the first quarter of 2014 compared to the first quarter 2013, and is on track to seeing continued growth into the second quarter. Analysts at Carter Research, a division of Carter Machinery, investigated the fastest-growing construction markets in the Southeast states based on new construction permits issued and expenditure per capita. The results of the analysis can be viewed below.
- Miami-Dade County, FL is the #1 largest and fastest-growing construction market in the Southeast, with a 218% increase in new housing permits authorized year over year.
- Florida is the single state with the largest construction growth in Q1 2014, with over $2.2 billion spent in construction for the Top 5 counties alone.
- Nashville, TN (Davidson County) was the only region to achieve near- Top-10 rankings across overall factors: Total Permit Value (#9), Rate of Growth (#3), and Per Capita Expenditure (#11)
- Wake County, NC, home to Raleigh & Cary, led the rankings with the highest number of single-family housing buildings authorized in Q1 2014, and was recently ranked the #2 Fastest Growing City in 2014 by Forbes.
- The Atlanta, GA metro area remains the single most concentrated region of construction in the Southeast, with more than 4,500 new construction units authorized within a 30 mile radius.
Current Status of US Economy & Real Estate Market
In the fourth quarter of 2013, the U.S. economy accelerated at a rate of 2.6% as measured by an increase in the Gross Domestic Product (GDP) over the fourth quarter 2012 [U.S. Census Bureau]. Government spending fell, as it did in the fourth quarter of 2012, but the economy slowly recovered as consumer spending increased by 1.5% last year over 2012.
In the first quarter, the economy slowed with a 1% decrease in GDP, the first negative figure in 3 years. Despite this slight downturn, many economists believe the economy will recover in the second half of 2014, as fixed investments (e.g. new residential construction) continue to increase.
In the Southern* region of the United States in particular, new private residential construction increased 6.6% in Q2 over Q1, as measured by the total number of units authorized.
Carter Machinery researched available construction building permit data on new privately-owned residential housing (single and multi-family residences), with the objective of discovering which southeastern states of the U.S. have grown and decreased their building needs from January through March 2014.
Data was collected from the United States Census Bureau at the end of March 2014. All information for counties in the states of Virginia, West Virginia, Alabama, Kentucky, Mississippi, Tennessee, South Carolina, North Carolina, Georgia and Florida was gathered up through the data made available by the government.
Researchers then used the information to sort the data based on buildings and unit permits issued, as well as the overall value of all permits issued. Counties were then ultimately ranked based solely on value of permits issued for the first quarter of 2014 for this report.
Results of the Data
For each state, counties are ranked based on the data available for the total value in US Dollars (seasonally adjusted rate) of the permits issued for January through March 2014.
- North Carolina
- South Carolina
- West Virginia
- Jefferson County - $101,876,931
- Madison County - $86,013,394
- Lee County - $58,372,935
- Baldwin County - $44,497,853
- Tuscaloosa County - $36,906,284
Jefferson County is the most populous county in Alabama and it holds the county seat, which is located in Birmingham. The county was named after Thomas Jefferson, the third president of the United States, and it hosts such highlights as the Alabama Jazz Hall of Fame, the Birmingham Zoo, and events such as the Southern Heritage Festival.
- Miami-Dade County - $772,790,360
- Hillsborough County - $518,885,272
- Orange County - $407,652,937
- Palm Beach County - $270,356,882
- Sumter County - $220,516,751
Miami-Dade County, currently the 7th most populous county in the U.S, is home to Miami and its numerous suburbs. The abundance of new construction projects, primarily condominium buildings and other multi-family housing, is due to a variety of factors, from the increasing cost of rent and a healthier, stabilizing economy. The average cost/unit in Q1 2014 was nearly $400,000, currently making it one of the highest-valued housing areas in the country. Miami is the fastest growing county in new housing expenditure, almost twice the size of growth of the second-fastest area, Lake County (See Table 2).
Of note: Osceola County (not shown above), whose county seat is Kissimmee, had the highest per-capita expenditure of new housing among all counties in Q1 2014. (See Table 3)
- Fulton County - $272,670,389
- Cobb County - $119,778,029
- Gwinnett County - $107,661,446
- Cherokee County - $78,379,743
- Forsyth County - $77,380,372
Fulton County is where Atlanta, the state capital, has been located since 1868. Ninety per cent of Atlanta lies within Fulton County while the other 10% lies in DeKalb County, not featured on the top five gross performers list.
Fulton is the most populous county in the state of Georgia and it is home to the World of Coca-Cola, the Georgia Aquarium, Zoo Atlanta and the centennial Olympic Park. All of the top five gross performers in Georgia are very closely located to Fulton County.
- Jefferson County - $37,126,721
- Warren County - $22,363,833
- Boone County - $12,316,323
- Kenton County - $11,292,596
- Marshall County - $9,263,400
Jefferson County is the most popular county in Kentucky and it is home to Louisville, the largest city in the state. Attractions include the Kentucky Derby, the Louisville Slugger Museum and the Speed Art Museum.
In the first decade of 2000, Louisville experienced one of the fastest population growth rates at 120%. This has led to Jefferson’s strong construction numbers and high value permits.
- Madison County - $30,186,030
- DeSoto County - $28,822,452
- Rankin County - $22,329,080
- Harrison County - $21,657,247
- Lafayette County - $17,633,040
Madison County is the fastest growing county in Mississippi by population and achieved the #1 ranking in new construction permits this quarter.
- Wake County - $377,744,160
- Mecklenburg County - $261,559,309
- Guilford County - $77,938,511
- Brunswick County - $65,057,693
- Iredell County - $62,234,102
Wake County is home to Raleigh, NC, and constitutes part of the Research Triangle area, which includes Raleigh, Durham, Cary, Chapel Hill, and outlying suburbs. Along with the banking industry in Charlotte (Mecklenburg County), the Research Triangle bolsters North Carolina’s economy through technological research and development, providing many job opportunities for the state. Wake County was recently ranked the “#2 Fastest Growing City in 2014” by Forbes.
- Greenville County - $137,127,385
- Horry County - $129,101,136
- Berkeley County - $94,612,177
- Charleston County - $83,093,366
- Beaufort County - $80,831,116
- Davidson County - $212,512,496
- Williamson County - $121,051,392
- Rutherford County - $111,751,708
- Shelby County - $77,011,097
- Knox County - $52,824,268
Davidson County holds the county seat city of Nashville, and is part of the Nashville-Davidson-Murfreesboro-Franklin Metropolitan Statistical Area. Nashville, nicknamed the “Music City,” is known for its many music festivals, which draw thousands of country music fans from the southern and northern states alike.
- Loudoun County - $191,362,038
- Fairfax County - $120,387,923
- Stafford County - $47,561,035
- Chesapeake County - $42,457,570
- Chesterfield County - $39,414,176
Loudoun County is a part of the Washington Metropolitan area and it is home to the Washington Dulles International Airport.
As of 2011, it has the highest median household income for all counties in the United States. Fairfax County and Arlington County are second and third, respectively, so there will always be more advanced construction projects for residential communities taking place in these areas of Virginia.
- Berkeley County - $21,779,593
- Jefferson County - $10,178,154
- Putnam County - $4,308,772
- Greenbrier County - $3,805,089
- Monongalia County - $2,663,201
Berkeley County is located in the eastern part of the state, adjacent to the Washington DC area. Two major interstate highways run through Berkeley County—I-81 (north/south) and I-70 (east/west), providing good infrastructure for commerce between Maryland, Virginia, and Pennsylvania.
Berkeley County boasts a relatively low cost of living index of 86.3 (100 = national average) as of March 2013.
For the entirety of the Southeast (herein defined as consisting of the following states: Alabama, Florida, Tennessee, Kentucky, Georgia, Virginia, West Virginia, Mississippi, South Carolina and North Carolina), the top ten gross performers for the first quarter of 2014 were:
Table 1. Top 10 Counties Ranked by Total Permit Cost in Q1 2014
|Rank||County||State||Total Permit Cost|
|6||Palm Beach County||FL||$270,356,882|
Table 2. Top 10 Fastest Growing Counties by Expenditure, Q1 2014 vs. Q1 2013
|Rank||County||State||Q1 2013 Total Permit Cost||Q1 2014 Total Permit Cost||% Increase|
Table 3. Top 10 Counties Per Capita Expenditure, Q1 20141
|Rank||County||State||Q1 2014 Permit Cost||
|Expenditure Per Capita|
Overall, Florida was the single state that spent the most on building permits for the first quarter of 2014.
Davidson County, TN performed the best, nearly appearing in the Top 10 across all metrics: #9 by Total Permit Value, #3 in Growth, and #11 Per Capita Expenditure.
*The US. Census Bureau defines the Southern states as: Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia. [http://www.census.gov/construction/nrc/definitions/]
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Carter Machinery is not responsible for errors/omissions in the data provided by the U.S. Census Bureau or any other third party.
1Includes counties with populations greater than 250,000 only (U.S. Census 2013 Estimates)