Local cities issued 753 single-family permits in December, down 10 percent from the record 833 permits issued in December 2002. While new-home permits remained strong in the fourth quarter of 2003, the pace cooled from earlier in the year when the metro area set six straight monthly records for permit activity. Despite the decline, permits were down just 4 percent from the record fourth quarter of 2002 and were 12 percent higher than the previous five-year average for the quarter.

Local cities also issued permits for 3,352 multi-family units last year, a modest 7 percent drop from 2002. Multi-family units comprise mainly rental apartments and attached homes. When combined with single-family for-sale homes, a total of 14,094 housing units were permitted in the metropolitan area in 2003, a 3 percent increase from last year.

“The strength of the local housing market in 2003 shows that despite economic uncertainties, conditions remain favorable for families to make the move to new-home ownership,” said HBA Executive Vice President Tim Underwood. “Forecasts call for mortgage rates to remain near historic lows, which should allow our local communities to continue growing and provide opportunities for more area families to enjoy the benefits of homeownership.”

Heading into 2004, Underwood said the most significant concern facing the local housing industry is the ability to provide the housing choices needed to sustain the area’s growth and provide support for new job creation. Through November, the area’s average new-home sales price was a record $237,239, up 4 percent from last year, according to Heartland Multiple Listing Service. The average new-home price in Johnson County alone soared 6 percent to a record $292,324.

“For the Kansas City region to be successful and create new jobs, the home-building industry must provide housing choices for families in all price ranges,” Underwood said. “The rise in new home prices affects everyone, including young couples and individuals just starting out, growing families who need more room, retirees looking to downsize and even upper-bracket new-home buyers. Developers, builders and communities will need to be more creative and aggressive in pursuing alternative forms of development that will help reduce new-home costs and provide more housing choices for Kansas City’s households.”

Johnson County remained the metro area’s market share leader, accounting for 34 percent of new-home construction activity for the second year in a row. Jackson County remained in second place with 23 percent market share, down two points from last year while Clay County ranked third at 19 percent, up two points from 2002. Cass County remained fourth with 8 percent (up one point) and Platte County fifth with 5 percent (down one point). Wyandotte County was unchanged at 5 percent, while Leavenworth gained one point to 4 percent and Miami County slipped one point to 2 percent.

Wyandotte County posted the largest percentage increase in single-family permits with a 48 percent hike. Clay and Cass counties each posted a 23 percent gain, followed by Johnson County which jumped 5 percent following a similar decline in 2002. The Missouri side of the metro accounted for 56 percent of all permits compared to 44 percent for the Kansas side. Missouri accounted for 55 percent of all single-family permits in 2002.

The top five cities in new-home construction activity remained unchanged from 2002. Kansas City, Mo., led the metro area in single-family new home permits for the second year in a row. The city issued 1,932 permits in 2003, up 22 percent from last year. The Clay County portion of the city accounted for much of the increase in activity with 1,334 permits issued, an increase of 32 percent. The Jackson County section of the city increased 14 percent to 358 permits, while the Platte County section dropped 6 percent to 240 permits.

Olathe finished second with 1,000 permits, down 17 percent from last year. Lee’s Summit ranked third with 852 permits, down 4 percent from 2002, followed by Overland Park with 842 permits, up 3 percent, and Shawnee with 542 permits, up 23 percent.

Rounding out the top 10 cities in new-home permits last year were Raymore, which moved up from eighth to sixth with 441 permits, a 31 percent increase; Kansas City, Kan./Wyandotte County, which also moved up two spots from ninth to seventh with 433 permits, a 47 percent jump; and Grain Valley, which moved from tenth to eighth with 364 permits, a 28 percent increase from last year. Lenexa and Gardner finished in a tie for ninth place with 350 permits. Lenexa dropped from eighth place last year despite a 2 percent gain in new-home construction, while Gardner edged into the top 10 thanks to a 34 percent increase in permit activity. Falling out of the top 10 was Independence, which slipped 8 percent to 345 single-family permits.

The Home Builders Association of Greater Kansas City (HBA) is the voice of the housing industry and the source for housing information. Comprising more than 1,000 member companies, the HBA represents an industry that contributes more than $2.5 billion to the Kansas City economy and supports more than 36,000 jobs in the Greater Kansas City metropolitan area.