Over the last five years, San Jose has added 158,900 jobs, but only issued 9,228 single-family unit permits. The jobs-to-permit ratio of 17.2 is the highest among the nation’s 100 largest metro areas, and a good reason why price growth has increased 55 percent since 2012.
The NAR’s Economists’ Outlook blog examined the metros that have the most unbalanced job-to-permit ratios, based on new construction and job growth since 2012. Nearly two-thirds of the metros have ratios above the national ratio of 3.8.
San Francisco (17.1) and New York City (16.8) trail San Jose in jobs-to-permits, with San Diego (11.9) and Miami (11.8) right behind.
On the other end, Shreveport, La., and Youngstown, Ohio, have negative job-to-permit ratios, suggesting that those metros have lost jobs over the last five years.
Shortages of labor, rising construction costs, and stiff regulatory costs have been cited as reasons why new home production is so low.