“New housing supply is not keeping up with rising demand. We estimate that the housing market is undersupplied by 3.3 million units and the shortage is rising by about 300,000 units a year” states a recent report by Sam Khter, Chief Economist at Freddie Mac. As one of the two large government-sponsored finance companies that underpins the US residential mortgage market, Freddie Mac tracks data across the country. This report’s concise observation explains the challenges new home buyers are encountering in many markets as limited inventory in turn limits buying options and sparks bidding wars for desirable homes.
Here in Jefferson County, the slowdown in new home construction after the 2008 recession is visible in the building permit numbers as reported by the County’s Office of Impact Fees. Looking just at single family houses, an average of 270 were built each year between 2004 and 2007 – that number fell by two-thirds to an average of 90 per year from 2008 to 2012. The pace of construction picked up after 2013, averaging 190 homes per year. Individual houses are included in the impact fee count when the permit is issued, so a single development can span several years in the chart above. For 2020, the count includes a 300 unit multi-family development in Fairfax Crossing that was permitted and will be built starting in 2021.
Looking at what’s ahead, the County’s Planning Department reports that there are several large developments under construction in the County, including the Magnolia Springs subdivision (300 houses), Rocky Ridge (132 townhouses), Kings Crossing (400 houses), and the nearly completed Aspen Green (200 houses). The County’s Office of Impact Fees Construction reports 149 residential building permits countywide (all jurisdictions) for the first three months of 2021. That number is mostly single family homes, which could suggest a full-year pace between 300 and 500 new single family housing units – a dramatic shift upward from the past two decades.
