New Jersey home building at best levels since 2007

In New Jersey, January new home building permits may be signaling the best yearly start since 2007.

Home construction in the state has gotten off to a strong start this year, continuing the recovery that began in 2012.

Builders got approvals for 1,752 units in New Jersey in January, up 84 percent from 950 in January 2012, according to the U.S. Census Bureau.

“It was the best start of any year since 2007,” said Patrick O’Keefe, an economist with CohnReznick, an accounting firm with an office in Roseland.

Some of the permits are for construction to replace homes destroyed by superstorm Sandy, but much of the activity reflects a continued slow recovery from the worst housing bust since World War II, O’Keefe said. Even with the increases, however, home construction this year is expected to remain below long-term averages, both in the state and nationwide.

More than 60 percent of New Jersey’s January permits were for multi-family projects, which have accounted for a growing share of new construction in the state for several years. Rental apartments are especially popular with builders, because of increased demand from households that can’t qualify for mortgages or don’t want to commit to buying a home.

Young adults, O’Keefe said, “want to retain some degree of mobility until they’ve established their careers, because of the uncertainty of the labor markets.”

The shift toward multi-family construction is likely to change the character of many neighborhoods in the Garden State, long dominated by suburban, single-family construction.

Tim Evans, head of research for the land-use group New Jersey Future, said that while some towns resist dense development, it can be attractive. “You can build stores and things people can walk to, and people like it,” he said, pointing to redevelopment in places like downtown Princeton.

In the Bergen County towns that were developed before World War II, he said, multi-family construction fits in well with established downtowns.

O’Keefe predicts that 21,500 housing units will be approved in New Jersey in 2013, up from just under 18,000 in 2012. By comparison, from 2009 to 2011, an average of only about 13,000 housing units were built each year in the state — the lowest levels since World War II.

Nationally, home building has also shown signs of revival. U.S. home building permits rose 37 percent in January, compared with a year earlier. In the U.S., about a third of permits were for multi-family construction.

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Accounting