Building permits take hit in county with sharp drop

By Rolf Boone | The Olympian • Published April 20, 2008

Applications for permits to build single- family homes have declined sharply in Thurston County's three largest cities, a result of weaker demand for new homes in a softer real estate market.

Permits for single-family homes fell more than 60 percent in Olympia, Lacey and Tumwater in the first quarter of 2008 compared with the same period last year.

Permits also fell in Yelm and unincorporated Thurston County, but not as dramatically.

"From a builder's standpoint, we don't want to build them if they don't sell," Olympia home builder Ron Deering said.

Through March, home sales had fallen 24 percent to 711 units from 938 units during the first quarter last year, according to Northwest Multiple Listing Service data.

The downturn has cost 15 Thurston County Development Services employees their jobs, director Michael Welter said.

The first-quarter data for single-family residential permits show:

• Lacey: Permits fell 66.3 percent in 2008, compared with 2007.

• Olympia: Permits fell 62.9 percent.

• Tumwater: Permits fell 60 percent.

• Yelm: Permits fell 45.3 percent.

• Thurston County: Permits fell 30 percent.

Lacey is likely to revise its building permit forecast based on the data, Community Development Director Jerry Litt said. The city had expected to issue less than 800 single-family building permits this year but the number might be even lower, Litt said.

For all of 2007, Lacey issued more than 800 single-family permits and more than 1,000 in 2006, according to city data.

"It's just a sign of the times and not uncommon historically if you look at building cycles," he said.

Housing booms, such as the county experienced in 2004-2006, usually are followed by a slump in housing starts, Litt said.

The inventory of homes on the market remained high in March, with more than 2,000 homes for sale in the county, according to the Northwest MLS.

But when the number of homes on the market drops, sales could begin to pick up, Deering said.