Sonoma County: News and Notes

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I saw an interesting chart in this week's North Bay Business Journal. It detailed the building permits issued in 2013 in Sonoma County. The good news is that there was a significant uptick in the value of residential housing. The twist is that the vast majority of the building is in multi-dwelling units. Single Family Home permits were in the middle of the range of that from 2008. Multi-Family units are back to a rate that was typical before the Real Estate Bubble.

Non-Residential Real Estate Construction seems to be recovering even more slowly. The value of construction was about flat from 2012 to 2013. This level is about 1/2 that of the level before the bubble. Pure Commercial Real Estate is leading the growth. The laggard is Industrial Construction. The level of Industrial Construction is concerning as the cumulative value since 2008 is about the same as a bad year before 2008.

One thing to remember about the chart is that the total value of construction in 1993 was about $363M. The value in 2013 was $317M. Long term negative growth is clearly not good for the economy, but it is not clear if the chart took inflation to account. If it was not, then the 1993 building was worth $586M in 2013 dollars.

The question is what can we do about it? It is not clear that there is anything practical that will be done anytime soon. I would think the upgrades to our transportation infrastructure will add value. It is not clear to me that people want more Industrial Construction in Sonoma County. I would hope to have some expansion to help balance our economy. We won't be the South Bay or the East Bay but we need to be more diverse than Napa.

Have a great week!

Jim Sackman Focal Point Business Coaching Change Your Business - Change Your Life! Business Coaching, Sales Training, Web Marketing, Behavioral Assessments, Financial Analysis