- May 4, 2024
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The housing market picture is becoming clearer, and the news is good for the local economy and job picture. The upward trend is becoming evident in nearly all markets. According to the National Association of Home Builders/Wells Fargo survey, October builder confidence rose to its highest level in 6.5 years.
More importantly, the Palm Coast and Flagler County new home permitting is becoming more robust. October saw 35 single-family home building permits issued, compared to only eight in October 2011. And permits issued in November have already surpassed last November's activity.
Not coincidentally, Flagler County registered its second consecutive month of decreased unemployment, the second greatest decrease among Florida counties. How much does homebuilding activity affect the local economy and job market? Probably more than you might think, both during construction and post construction.
During construction
The construction of a new home involves building inspectors, the builder and several trades: heating and air conditioning, plumbing, masonry, electrical, framing and roofing, just to name a few. These workers earn wages which are mostly spent locally at gas stations, restaurants, theaters and stores. The immediate economic result of new home construction also includes impact fees and permitting fees paid to the local taxing jurisdictions — around $15,000 for each new Palm Coast home. Many building materials are purchased locally too, supporting the supplier's employees.
Post construction
New home occupants, whether renters or owners, create a steady and ongoing stream of economic impact in the surrounding area. They shop, generating sales taxes. They get haircuts. They pay property taxes. They require services. Their children need schools and teachers. Cumulatively, they create a need for additional commercial construction which leads to wider choices for local residents.
A 2006 study by the National Association of Home Builders evaluated the economic effect of home building in Palm Coast. Even though the market was booming at that time, the assumptions underlying the study remain fairly consistent with today's market factors.
It's estimated that construction of the 35 homes permitted in Flagler County in October will generate $3.8 million in local income, plus $1,062,727 in revenue for local business owners. The construction will support 97 local jobs and generate $2.7 million in local wages and salaries, as well as $703,181 in taxes and fees.
This year to date, Flagler County and the city of Palm Coast have issued 194 building permits for single-family homes. That translates into $21.2 million in local income and $5,890,545 in local business owner revenues. It supports 538 local jobs and generates $15 million in local wages and salaries, as well as $3.9 million in taxes and fees collected.
It's not surprising that the housing industry is generally credited for leading the economy out of past recessions.
