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Bismarck building permit values drop in 2019; commercial permits also down
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Bismarck building permit values drop in 2019; commercial permits also down

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Construction continues on the Missouri River Dental building on North 15th Street near Skyline Boulevard in north Bismarck. The dental practice is expected to be open by the fall.

The value of building permits Bismarck issued in 2019 decreased 19% from the previous year, and the number of commercial permits issued dropped 26%.

The total value of building permits issued in North Dakota’s capital city last year was just under $206.9 million, compared to about $254.7 million in 2018. The city issued 201 commercial building permits in 2019, compared to 272 in 2018.

Costco’s upcoming 157,400-square-foot facility in Bismarck made up 9% of the city’s building permit value last year, while Evangel Church’s expansion and renovations made up 7%. Both projects are under construction. They're among the top contributors to the total value of building permits last year, said Brady Blaskowski, a city building official.

Bismarck’s school construction projects in 2018 -- such as Bismarck High School’s renovations and the construction of the Gateway to Science Museum -- along with other commercial construction projects that year influenced the drop in building permit values the next year, Blaskowski said.

Commercial developers have been having a "tough time" dealing with a shortage of businesses willing to rent space, according to Scott Ritter, a commercial Realtor with Aspen Group Real Estate.

"There’s no question that we’ve seen somewhat of a slowdown in the commercial industry. I mean, it’s tough to build things when we’ve got things to fill," Ritter said. "We’ve got a lot on the market, and there’s only so many buyers and tenants that are going to fill these things."

Bismarck issued 185 permits for single family homes in 2019, compared to 151 in 2018. The city also issued 52 building permits for townhouses in 2019, compared to 45 building permits the year before.

"I wouldn't say slow, but I wouldn't say booming. I would say just pretty steady," said Jeran Thomson, owner of JE Homes. "I think the (housing) market just needed to kind of readjust."

The South Meadows housing development in south Bismarck, and the Boulder Ridge and Eagle Crest developments in northeast Bismarck, were significant residential housing projects completed in the past two years, Thomson said.

Residential remodels and additions accounted for about $4.3 million in building permit activity in 2019, compared to $3.5 million in 2018 -- a 23% increase. Commercial remodels and additions accounted for about $86.7 million in 2019, compared to about $100.5 million in 2018 -- a 14% decrease.

The value of building permits Bismarck issued last year is the third-lowest since 2010. The number of building permits for single family and two-family homes are both the second-lowest in the past 10 years. The four highest values in building permits over the past 10 years were between 2012 and 2015 -- a result of the North Dakota oil boom, Blaskowski said.

Coronavirus woes

Home builders are bracing for the impact of the coronavirus pandemic on the housing market, Thomson said. 

"Somebody just backed out of (buying) a house of someone just yesterday because oil prices are down, and Doosan (Bobcat) laid people off," he said. "These things are going to affect the home building market, the residential real estate market, now this year, I think."

Thomson said he was expecting an increase in activity in the housing market in 2020. The number of houses on the market began to fall below 1,000 in the past three months, which "usually is an indicator we need to build more houses," he said.

Ritter said interest from businesses in renting commercial property was "incredibly encouraging" moving into 2020.

"Then, of course, this thing hits, and then the stock market hits, and the oil prices hit," Ritter said. "It's going to be a tough April, and hopefully it's weeks and not months."

Reach Andy Tsubasa Field at 701-250-8264 or andy.field@bismarcktribune.com.

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