Where are Building Permits Booming Since 2000?
In real estate, and the economy in general, it pays to outguess where others are heading. One of the ways to make such gauges is with building permits.
On the one hand, building permits provide a signal of where developers think demand will be highest. As such, investing based upon where building permit activity is strong may be fruitful.
On the other hand, using building permit data for investing can be problematic if one invests on the tail end of a hot streak. Remember, people move, industries go out of favor, politics change, and economies shift.
On to the Answers to the Question
Recognizing the double-edged sword investing based upon building permit data can be, where have building permits been booming since 2000?
The answer, of course, depends upon whether one looks at the data on an absolute or percentage growth basis. Large areas, such as New York or Chicago, will always have higher absolute growth because their growth is coming off of a much higher base. With this in mind, it would likely come as no surprise to see the top growing areas since 2000 as Atlanta MSA, New York MSA, Chicago MSA, Dallas MSA, and the Phoenix MSA.
Investing just based on size would typically be safe – there’s usually always someone to rent to – but may not prove to be most profitable.
Looking at the building permit figures on a percentage growth basis may be more useful.
Growth Rate Basis
Can you guess which areas show up on top?
Interestingly, the top 4 from 2000 to 2019 (monthly sum) were Midland, Texas; Auburn-Opelika, Alabama; Odessa, Texas; and Cheyenne, Wyoming.
In sum, it’s useful to look at building permits when allocating investments across areas. Of course, one would need to take careful consideration of the city, including the major employers, tax policy, and net migration, among others. In this vein, building permits may prove to be quite useful in maximizing one’s investment.