Did Riverhead’s economy experience a mini-revival in 2014?
Single-family home construction numbers — better known as housing starts and widely considered an indicator of the state of the economy — more than doubled in Riverhead Town last year. This, despite the fact that the number of new homes built still wasn’t anywhere near the numbers from 2002 and 2003, which were almost five times higher.
Statistics from the town building department show that 59 permits for new single-family residences were issued in 2014. In contrast, 25 were issued in 2013 and 34 were issued in 2012.
When permits for new modular and manufactured homes are included as well, the 2014 permit total rises to 77, compared with 46 and 53 the previous two years. The town building department divided its statistics into additional categories in 2012, so what used to be considered “new residential” permits now includes new single-family homes, manufactured homes and modular homes.
That remains a modest number, however, compared to figures from more than a decade ago: 217 new residential permits were issued in 2001, 381 in 2002 and 271 in 2003, according to town statistics.
The numbers haven’t been anywhere near that for years, “and never will be,” said Mitch Pally, executive director of the Long Island Builders Institute.
“There’s no question that in 2014 there was an uptick in most places on Long Island, and in most categories, for home-building,” Mr. Pally said. “There’s been a pent-up demand and more financing has become available, so you’re seeing a gradual increase. You’re not going to see large-scale residential development again on Long Island.”
That, he said, was a product of the banks’ sub-prime lending practices in the early 2000s, which led to a collapse years later. Those numbers also translated in Riverhead, where the number of new home construction permits plummeted from 124 in 2007 to 59 in 2008.
Nationwide building trends show that Riverhead is still on track with the rest of the country, according to new housing starts statistics collected by the U.S. Census Bureau. Last year, 4.8 percent more permits were filed for new homes nationwide — 1.03 million, up from 990,800 in 2013.
Those numbers were also consistent at the state level. Last year, there was an 8.7 percent increase in the number of new home permits issued, to 35,448, according to the Census Bureau.
Meanwhile, recent unemployment numbers have dropped on all levels.
New York’s Department of Labor recorded a drop in unemployment in Riverhead from 7.5 percent in March 2014 to 7.1 percent this year. Statewide, unemployment fell from 7.1 to 6.4 percent year-over-year in March. Across the nation, the unemployment rate dropped to 5.5 percent — the lowest it’s been since June 2008.
“It’s a good sign,” said realtor Pat Fedun of Fedun Real Estate in Aquebogue. “It’s picking up, but the market is really low on supply, especially for homes in the so-called affordable range — the $300,000 to $400,000 range. There’s great demand for those houses.”
Mr. Fedun said there’s still a decent supply of higher-priced homes, but the problem is that when there is an affordable home, “you have five buyers showing up for a house. And that eventually leads to higher prices.”
He said he believes it’s hard for Riverhead to support higher-priced homes because the pay scale for most residents isn’t that high.