Housing starts have plummeted to 17-year lows in Wichita, bucking a slight national rebound in September. There were 47 building permits issued in September in the Wichita area, slightly more than half of the 86 issued in September 2009 and the lowest figure recorded since 1993, when the Center for Real Estate at Wichita State University and the Wichita Area Builders Association began totaling permits for the region.
"Consumers want to be hopeful about the future," said Paul Bishop, vice president for research at the National Association of Realtors.
"But they're so much on edge that any change in the outlook leaves them unwilling to take even what appear to be prudent financial risks."
Nationally, housing starts rose 0.3 percent to a seasonally adjusted annual rate of 610,000 units in September, thanks to a 4.4 percent gain in the single-family sector, according to the U.S. Commerce Department.
New single-family starts rose to a seasonally adjusted annual national rate of 452,000 units, the best figure since May. However, starts remained down in the Midwest in September, down 8.2 percent.
Meanwhile, multifamily starts fell 9.7 percent in September to a 158,000-unit rate. In Wichita, 45 permits were issued in September last year. This year: 29.
"That's ugly," said Stan Longhofer, director of Wichita State's Center for Real Estate.
And it's unlikely to change significantly for a year. Earlier this month, Wess Galyon, WABA's president, said his membership doesn't expect the industry to bounce back until 2012, although traffic at this fall's Parade of Homes has been brisk, he said.
"The underlying economy is a big part of it," Longhofer said, "but home sales are down so much because of an unusual sales year."
The federal homebuyer tax credits moved buyers toward existing homes, Longhofer said, despite historically low interest rates.
"It's just rare for a first-timer to buy a new home. It happens, but it's not common," Longhofer said.
Despite the September national numbers, Bishop said housing starts have very little momentum nationwide.
"They're just bumping along at a pretty low level in most places," he said.
"There are two prongs to the situation. With single-family starts, it's mostly consumer confidence and the general lack of jobs. With multi-family, it's the lack of developer ability to obtain project financing."