What do building permits tell us about the economy in Sacramento?

We hear so often about how new construction has basically stopped in the Sacramento area. Instead of just listening to a blanket statement though, let’s take a look at the actual trend of building permits in Sacramento County from 1994 through 2010. The information below is based on data from the United States Census Bureau for the number of permits pulled for new construction of single family residential properties in Sacramento County.

What do you see? Does anything surprise you? What happened between 2004 and 2005 to chop the level of permits in half? Do you think more or less permits will be issued in 2011? Do you pay attention to the number of permits pulled as an economic indicator?

If you have any real estate appraisal, valuation consulting, or property tax appeal needs, contact me at 916.595.3735, www.LundquistCompany.com or via Facebook.


  1. says

    Wow, your area and my area have something in common: A huge decline in building permits over the last several years. Both areas have a long way to go to get back to where they were.

  2. says

    When money was easy, everyone borrowed to fix up their home. Also, every dollar spent on renovation back in 2002-2007 was seen as an instant bump in value. Now that values have declined, there is no equity to refinance with anymore. Also, people are not “feeling rich” anymore, and are just not indulging on many home improvement projects anymore. Very interesting report to see it in a graph.

    • says

      You are so right. Money used to be so free flowing during the peak years on the graph. I don’t know anyone who has not cut back in some way due to the economy. Builders certainly cannot make a profit in many areas, so they are not pulling permits hardly at all. It would be great to see that change a bit this year though.


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