Home builders foresee improvement
They hope dismal 2009 gives way to slight uptick this year
Friday, January 8, 2010
They hope dismal 2009 gives way to slight uptick this year
After one of the worst years of the past 20 years in 2009, Clark County home builders say they are looking forward to improvement, if only slight this year.
According to a report this week, the value of new home construction in unincorporated Clark County dropped below $100 million in 2009, down from peak building years in 2004 and 2005, when annual construction values topped $325 million. Last year, new home construction dropped 24.8 percent to $98.2 million, the first year home-building activity dropped under $100 million since 1986.
Builders were issued 415 permits, a 29.9 percent decline from the 592 permits issued in 2008.
This year should be better for builders, who say the good news is that general construction costs and the price of materials are near all-time lows.
However, mortgage financing can still be difficult to come by and the county’s high unemployment rate could continue to keep the dream of home ownership out of reach for some local buyers.
“In my opinion, we should be pretty close to the bottom,” said Tracy Doriot, owner of Vancouver-based Doriot Construction, and president of the 936-member Building Industry Association of Clark County.
Doriot said Clark County’s high foreclosure rate — now the fifth-highest of Washington’s 39 counties, according to California-based RealtyTrac — contributed to the slowdown in new construction by flooding the local housing market with existing, bank-owned properties.
“If a lender is selling a mansion for 75 cents on the dollar, you can’t compete in the custom home market,” said Doriot, who specializes in the construction of high-end houses in the $1 million to $3 million price range.
Doriot launched his construction business in 1980, building houses in Cascade Park. In the 1990s, he built several custom homes along the upscale slopes of Prune Hill in Camas.
Turning point
Yet, Doriot and others say there are signs that the tables are turning, with entry-level home buyers taking advantage of bargain-priced tract housing and a federal first-time home buyers’ tax credit of $8,000.
“We’ve seen the bottom and we’re actually starting to curve back up,” said Michael Shana-berger, sales manager for Vancouver-based Manor Homes Inc.
The company built and sold 136 moderately priced — about $220,000 on average — houses through 2009. It was the most homes sold by any Clark County home builder last year, followed by Vancouver-based New Tradition Homes, which in 2009 sold 92 houses, most in the moderate price range.
“We’re gearing up for a 22 percent increase in 2010. That’s our goal as far as production,” Shanaberger said.
Doriot and others say some builders are being helped by discounted housing lots, down by as much as 60 percent from the height of the market five years ago.
“Lots that were $250,000, you can now get for $100,000 and that helps significantly,” he said.
Lumber prices have also gone down by as much as 50 percent, with plywood going from about $25 per sheet in 2005 to about $12 or $13, Doriot said. He added that it would take between 200 and 250 sheets of plywood to build an average 3,000-square-foot home.
Doriot said more new home buyers entering the market would help recover lost construction jobs and, in turn, generate more new home buyers.
“Obviously, if you’re unemployed, you’re not buying a new home. If we’re able to put more people back to work, there’s a trickle-down effect throughout the industry,” Doriot said.
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