At first glance, Harford County residential building permits appear to have gone up considerably over 2012. There were 590 new permits issued in 2013 and 457 in 2012, a 29 percent increase. However, out of the 590 new permits, 188 were for apartment units, thus leaving 402 new permits for single family detached and townhouse units. This is 12 percent less than the 457 single-family detached and townhouse permits issued in 2012.
To put these numbers in perspective, Harford County went nearly 20 years in a row with building permits over 1,500. In the late 1980’s and early 1990’s, Harford County actually averaged well over 2,000 building permits per year. It was one of the fastest growing counties in the United States. 2006 was the first year of the major decline seeing 740 permits only to bottom out at 355 in 2011. To be fair, these numbers do not count any permits issued in the incorporated towns of Bel Air, Aberdeen, and Havre De Grace.
So why are these numbers so anemic? I have a few ideas:
1) The end of the housing boom. Anyone with any experience during those days new that it wouldn’t and couldn’t last forever. It was unsustainable. Easy money and speculators are not good future indicators.
2) The slowing of the emigration from Baltimore City. Much of our population growth came from folks leaving Baltimore City seeking the suburban life with better schools and lower crime. Harford County’s population was growing 3,000 to 6,000 people every year. The past five years, according to US Census statistics, we averaged approximately 1,300 per year. The student enrollment has been stagnant. Give or take a few hundred every year, it is even down from its peak in 2002. The board of ed’s own projections do not foresee any substantial growth in enrollment.
3) Harford County lost its price advantage. For many years, residential land was relatively cheap compared to other suburban counties including Baltimore County. Over the years, the price gap has closed considerably. With gasoline prices more than doubling over the past several years, home buyers start factoring in the cost to commute to work. This has especially impacted the more rural properties.
4) There is an overall economic malaise. Although Harford County is holding its own and has considerable positive economic impact from the BRAC, national trends are not giving much hope for a growing economy. Increased taxes and burdensome regulations are like a wet blanket on the economy. Many are losing their jobs or threatened by job loss. It’s difficult to sign a mortgage for 30 years when you are unsure about the future.
So what does this all mean? I believe Harford County has transitioned into a more mature cycle. Supply and demand have reached a stable equilibrium point. People are still buying and selling for various reasons, but there probably will not be that huge influx of people from outside Harford County which tends to increase demand and subsequently housing prices. This is the new reality for Harford County. At least for now, we have to recognize these facts and proceed accordingly.