(NorthJersey.com, December 2) Builders are on track to start the largest number of New Jersey homes this year since 2007, signaling the revival of a market that was severely constricted after the recession and the 2008 financial crisis.
According to new census data on building permits, home construction is running about 37 percent ahead of last year's pace. Through October, 20,051 housing units were started — already passing last year's full-year total of just under 18,000.
The market's momentum is being powered by multifamily construction, which has accounted for about 57 percent of the activity through October — a similar percentage to last year.
"Overall, it's a positive report," said Patrick O'Keefe, an economist with the accounting firm CohnReznick in Roseland. He expects more than 23,000 housing units to be started this year. "It's going to be a very good year, relative to where we've been."
This year's construction pace is a dramatic rebound from the 13,000-unit average that prevailed from 2009 to 2011 — the lowest numbers since World War II.
One example of the construction revival is Fair Lawn Promenade, a mixed-use development with 150 apartments being built on Route 208 in Fair Lawn. The builder, Garden Homes of Short Hills, is betting on consumers' increased demand for renting versus owning.
"We're seeing more and more individuals who are choosing not to own because they'd rather not deal with the issues associated with value and the issues associated with mortgages," said Scott Loventhal, director of development at Garden Homes' rental division, Garden Communities.
In addition, he said, "they like to be near transit." Fair Lawn Promenade is within walking distance of the Radburn commuter train station.
The project is being built on the site of an old Kodak film processing plant — reflecting the growing tendency of builders to create "infill" development in New Jersey's already developed areas, rather than build on open, exurban plots.
More of the same
O'Keefe said multifamily construction is likely to continue to dominate the New Jersey market over the next several years, as the large "millennial" generation forms households.
"Their commitment to the American dream of homeownership is less pronounced than the boomers', and they're also experiencing less robust employment and income gains," he said. Facing a less healthy job market, he said, they want to be able to move for a job if they need to.
The building permits report was one of several recent reports showing improvement in home construction, though activity remains below long-term levels. No national housing-start data is available yet for September and October because of the federal government shutdown, but U.S. home-building permits were up 13.9 percent in October, compared with a year earlier.
And construction employment grew by 4 percent in New Jersey and 3 percent nationwide in October, compared with a year earlier.