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Northern Kentucky’s first quarter single family residential permit activity reveals strong growth

Northern Kentucky is experiencing strong growth for residential single-family permits in this first quarter over 2020’s first quarter. Sixty-three percent growth is visible in the volume of residential single-family building permits in Boone, Kenton, and Campbell. An 83 percent surge in Boone County is most notable.

“We have not experienced this level of first-quarter single-family residential permit activity since 2007; on the cusp of the Great Recession,” said Brian Miller, Executive Vice President of the Building Industry Association of Northern Kentucky

Residential remodeling permitted activity is at an all-time high for the first Quarter. The last three years’ first quarters (Q1 2019-2021) equal that of the first quarter permitted residential remodeling activity over the prior seven years (Q1 2012-2018), which more than doubles the amount of the prior ten years (Q1 2002-2011). While increases are slowing for residential remodeling, Northern Kentucky has experienced a very prolonged period of increasing residential remodeling activity. It is important to note that this data only includes permitted activity and does not include do-it-yourself projects or smaller projects not requiring a permit.

“Commercial and industrial projects have seen a slight pullback for the first quarter of 2021′” said Miller. “However, historically speaking, new commercial/industrial permits for the first quarter are only slightly lower than that same quarter of 2020, while commercial/industrial capital reinvestment projects have pulled back more significantly. Capital reinvestment projects continue to be higher than ten and twenty-year trailing averages.”

New commercial permit values continue to outpace capital reinvestment dollar figures, showing Northern Kentucky is still in a growth pattern for new projects in the area. The permits reveal a slowing of Amazon Prime International Air Hub-related projects.

“Commercial and industrial projects can be far more sporadic than residential projects due to the number of them and the fact that there is no real “season” for peak activity,” Miller said. “So we will continue to monitor this sector of our industry closely to see what the future may hold.”

According to Miller, there are serious barriers affecting segments of the homebuying population and commercial/industrial development.

“The residential sector has been buoyed by low-interest rates and a historically anemic existing market inventory, as well as societal changes amplified by the pandemic,” Miller said. “Material cost increases are having a negative effect on builders’ ability to bring attainable priced homes to the market. Lumber alone has been the largest driver in cost increases. The average buyer in the local market is now paying an average of $26,000 more in lumber prices per home than they had just one year earlier.” Material and labor costs continue to impact the commercial/industrial sector of the industry and challenges remain regarding local decisions made by those in government that can “make or break significant economic development potential.”

Access the full Northern Kentucky Construction Market Report at buildersnky.com.

Building Industry Association of Northern Kentucky

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