Homebuilding permits for region up 31% in April

June 14, 1994|By Timothy J. Mullaney | Timothy J. Mullaney,Sun Staff Writer

Building permits for new homes jumped 31 percent in metropolitan Baltimore in April, the Baltimore Metropolitan Council said yesterday, showing the local economy to be bouncing back from weather-related problems early in the year and resilient in the face of higher mortgage rates.

Builders took out permits for 1,074 single-family homes, which includes townhouses, the council said. That compares to 814 in April 1993. The jump is bigger than the area saw earlier in the year; permits are now up 15 percent for the year. But an economist for the council downplayed the size of April's gains.

"I don't think the April numbers signify anything new," said council economist Josef Nathanson. "It's catch-up at this point" because traffic at new-home developments was curtailed by the cold weather of January and February.

Permits for nonresidential construction rose 8.2 percent in April, continuing the near-dormancy of the commercial development market. Michael A. Conte, director of the Regional Economic Studies Program at the University of Baltimore, said most of the biggest projects continue to be built by government and nonprofit institutions rather than profit-making businesses. The biggest permit was for $6.5 million of work on a city-owned wastewater treatment plant in Brooklyn.

"This says quite screamingly that aside from a few areas, they [developers] are shut down tight," Mr. Conte said.

Building permits, especially those for new homes, are considered a leading indicator of economic health. Strong growth in building permits is a sign that stronger growth in other sectors is on the way.

Robert Lefenfeld, a senior vice president at Legg Mason Realty Group in Baltimore, said customer traffic at the new-home developments his company follows has rebounded from a slowdown after the Federal Reserve began to push interest rates higher in February.

"We're seeing people come back out," Mr. Lefenfeld said. "We're hoping the spring market will still pull through."

Legg Mason reported in April that local new-home sales in the first quarter actually fell during the first three months of the year.

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