New home permits are up 51% and new apartment permits are up 30% through February compared with the first two months of 2021
VISALIA – A tight housing market is driving up home prices as active listings drop and the number of homes for sale dwindle. Help might be on the way as local cities begin ramping up building permits for new homes and new multi-family units.
Building permits in Visalia climbed in all categories during the first two months of 2022, the city reports. That includes both single family and multi-family permits issued to builders, as home permits are up 51% and apartment permits are up 30%. Home builders got permits for 82 new units in February compared to 38 for the same month in 2021.
In another category, residential alterations, better known as remodels, climbed by 60% in Visalia and new commercial projects added an eye popping $93 million, largely based on permits recorded for Ace Hardware’s new million square foot distribution center. In the commercial sector, alterations and sign permits climbed 500% year to date as owners poured in $28 million in this category compared to $4 million for the same two months in 2021. The total value of all permits for January and February hit $183 million, $123 million more than last year.
New construction couldn’t come at a better time for those worried about escalating home prices and rental fees as people across the state are paying more for homes. Tulare County home prices have risen 8.5% over the last year and new median home prices are now over $333,000, according to the California Association of Realtors. That’s still lower than the median home price in California of $765,580.
Movoto Real Estate, the state’s second largest online real estate brokerage firm, said “the median list price of homes in Visalia was $415,045 in February 2022, compared to $379,900 in 2021. Visalia was a seller’s market in February 2022, which means that there are more people looking to buy than there are homes available.”
Housing inventory hit a record low in December 2020 and has made a slight recovery but active listings in December 2021 and January 2022 were at a four-year low. In January, California Association of Realtors said there is less than two months of housing inventory in Tulare County and statewide, down 10% from 2021, causing a near 4% drop in overall sales. The average home in Tulare County is only on the market less than a dozen days before being sold. The housing supply has remained consistent in the last year while the rest of the state has seen at least a 5% decline in the rest of the state, including a 30% drop in the Bay Area and 35% drop along the central coast.
Condos and townhomes seem to be leveling off as the median sold price dropped 44% from December 2021 to January 2022 and is down more than 16% from January 2021 despite having less than a six-week inventory. Only sparsely populated Northern California counties saw an increase in home sales in January as a region.
To make up for inventory shortages, Tulare is ramping up scores of new subdivisions at a lower price point than Visalia. Last month, the city of Tulare said it had already received plans to construct thousands of single-family and multifamily dwellings in a town that saw just 120 homes built last year. That would be more than Tulare’s larger neighbor Visalia which saw 840 home permits issued in 2021 including 200 multifamily units. Also, a national builder is talking to Exeter about a new home subdivision there.