Panoramic view of Philadelphia.
Philadelphia is among the largest metropolitan areas in the country that saw the biggest drop in 2022. Photo: Pixabay.

Construction in Pennsylvania: Application for permits to build reduced in 2022

A new study reveals some of the problems that plagued the real estate sector last year.


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Noting a waning momentum in the U.S. housing market, where the number of units completed has increased every year since 2012, Point2, an international real estate search portal part of Yardi Systems Inc., shared new data showing permitting and home starts are down across the country.

The study, which analyzed the dynamics of the sector in the last decade, highlights that Pennsylvania, where permits reached record levels in 2021 only to fall in 2022, is one of the examples of this phenomenon, with a drop of -48.87% compared to 2021.

About the Study

Point2 points out that the most recent banking problems, the increase in inflation and prohibitive mortgage rates are part of a series of factors that have led to the current behavior of the market.

Seeking to gain a deeper understanding of how employment and home construction trends have evolved over the past decade, the real estate search portal took into account historical data on permits, units completed and started, along with data on job occupancy, income and business.

Accompanied by an extensive resource page, the report highlights year-over-year changes in residential construction over the past decade across all states and 384 U.S. metropolitan areas.

Findings For Pennsylvania

Among the main findings for Pennsylvania, the following stand out:

  • The state saw a record 86.31% increase in permits in 2021 pushed by an increase of multifamily permits: 26,590 with 25,427 in Philadelphia metro alone. Permits activity in the state slowed down in 2022, falling almost 50%. However, the volume was close to that of 2020, when permits issued recorded an almost 10% increase
  • Consequently, Philadelphia is among the largest metros nationwide to record the biggest drop in 2022. Permits went down 61.7%, after a record 124% increase in 2021. A likely cause for this drastic decrease was the change in taxes for the residential projects starting January 2022, which forced many developers to hurry up and take care of permitting before that date
  • Drops in permits activity were also recorded in Pittsburgh, included in the nation’s top 10 metros with the lowest number of permits issued in 2022: 4,033. However, when comparing to previous years, the change in numbers looks less severe: 5,223 permits issued in 2021 and 4,824 in 2020;
  • Fewer permits were also issued in medium metros within the state, like Youngstown-Warren-Boardman (344), Scranton-Wilkes-Barre (530), and Lancaster (1,284)
  • In Pennsylvania, the total number of employees active in the construction industry represent over 4% of all active employees. Their number kept growing for the past decade, going from 225,676 in 2012 to 258,409 in 2022. Construction-related businesses also grew by 10% in 2022 compared to 10 years ago.

To view the full report, click here.


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