Last blog, I promised some comparative numbers for you to see which way the market is moving and to help position yourself for growth. We’ll do so today. But first, I’ve got to say that I’m a huge believer in positive thinking. The problem is that we’ve been around a bit too long to completely forget what the market used to look like back in 2007, just before the train wreck that all but changed the way the sun rises and sets each day. Take a look at this graph, be depressed and then get over it.

Year Single-Family Permits Single-Family Dollars Commercial Permits Commercial Dollars Total Permits Total Dollars
2011 2,206 $300,135,204 1,438 $486,787,476 3,644 $786,922,680
2010 2,373 $301,876,086 1,235 $348,077,789 3,608 $649,953,875
2009 1,802 $191,687,513 1,663 $703,586,970 3,465 $895,274,483
2008 4,538 $599,270,246 4,496 $1,614,806,476 9,034 $2,214,076,722
2007 11,548 $1,587,412,657 4,287 $1,766,389,792 15,835 $3,353,802,449

There is an enormous amount of information that can be gleaned from the information above. Even more if you are a DEC subscriber, because you have the tools to drill down into specific market segments that enable you to point yourself in the best direction. Please excuse my shameless commercial plug for our company!

First let’s talk about Single-Family. Average new home pricing was $137k in 2007, $106k in 2009 and back up to $136k so far this year. Keep in mind that there has been a general shift to purchasing existing stocks of previously owned homes and that nearly half of those are being bought in either foreclosure or by short sale. DEC International forecasts we’ll see over a billion dollars of new sale single-family construction this year and a continuing disparity both geographically and in price points as builders weigh carefully where, when and what to build. High end builders are servicing an ever larger group of well-heeled individuals buying expensive homes with all cash or large down payments in an attempt to “park” their money for the long-term. Large builders will continue to solidify their hold on the Atlanta market to a degree not previously seen, due to their access to inexpensive capital and their ability to acquire and hold bargain basement land. Opportunities are out there and are likely to slowly accelerate, mirroring the national outlook. It’s all about confidence at this time.

Commercial construction has an immutable connection to single-family construction. New neighborhoods are developed in response to an in-migration of people moving into our markets with jobs. Atlanta and the state at large are beginning to develop a steadily growing highway of jobs and the people who come to fill them. DEC forecasts 50,000 net in-migration in 2011. Make no mistake about it; we are years away from a full economy, but construction often gets out ahead of the path of growth and development and this recovery will eventually mirror past recoveries. Let’s take a look at the numbers above. Commercial projects in 2007 averaged $112k. In 2009 the average was $203k and currently, the number is an average of $133k. The conclusion we draw is that we are back to a more normal mix of projects after only certain large projects already in the pipeline were going forward a couple of years ago. We see a lot of tenant finish work moving forward as lease rates are very depressed for landlords and extremely favorable for those signing leases right now. Look for an increase in medical projects, multi-family construction and more bargain priced retail to dominate this year. Also, we see a continued push for large distribution facilities as many companies consolidate smaller facilities into larger ones. Financing is available to successful, cash flush companies, but will continue to be tight for everyone else. Commercial construction will rebound faster than single- family due to the continued overhang on the single-family market.

When you look at the above numbers it’s hard to remember what a “normal” market looks like. We’ve been collecting permit information since 1993. For the same period, let’s say 1997, residential and commercial counts were 10,410 and 2,922 respectively. Worth noting, those commercial permits averaged $311k back then.

Each reader will likely draw a different conclusion as to what these numbers mean except for a general consensus that the road back is long and steep. One bright point for all you survivors out there…there is less competition at every level. There are fewer subs, suppliers and GC’s than at any time in the last 20 years, based on both objective and subjective information we accessed. Unfortunately, they are also chasing a markedly smaller market as well. And, therein lies the rub. Georgia is a big state. We have 159 counties and hundreds of cities, making it all but impossible to know everything there is to know. That’s why we hope you will rely on us with our many different reports and services designed to keep you in the know and give you that strategic advantage that you need, not only to survive, but to prosper in this market.

I hope you are on plan for a good year. We would love to hear from you concerning this blog or any other I’ve written; write me below with your comments, insights and thoughts. Or, better yet, call us today and find out how we can help you be one of those winners starting right now. It’s a fact, that historically 80% of industry participants never spend money to make money. Quite a few of them are probably not around anymore. Be proactive, call right now.

Good Selling!

Allan Feifer is the President of DEC International. Allan started DEC more than 35 years ago and has background in the process and construction industries as well as many years as a recognized authority on construction trends and analysis. Allan lives in Florida with his wife and two cats. You can reach him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .