Clark County home building activity in April continued to show signs of rebounding for the sixth month in a row.
The data showed 61 new-home permits were issued in April representing $16.7 million in value, up from 37 permits valued at $7.7 million in the same month last year, the Clark County Community Development Department reported Thursday. It was a 64.9 percent increase in new-home permits compared with April 2009 and the number of permits issued was the second-highest for the year. The peak was in March when 103 permits were handed out to build single-family homes,
Builders point to a federal tax credit for fueling demand and creating a steady increase in new housing starts each month since November. But some are concerned market momentum could ebb now that the credit — a write-off of $8,000 for first-time home buyers and $6,500 for move-up buyers who have lived in their primary residence for five years — has expired.
‘Business as usual’
Sales were already slowing down in the first week of May, said Michael Shanaberger, sales manager for Vancouver-based Manor Homes Inc., which is selling homes in 16 Clark County subdivisions.
On Saturday and Sunday, “it wasn’t boom-busting like before,” he said.
Shanaberger expected the slowdown would come after his company sold 25 houses in March and 20 houses in April, he said. However, he said potential buyers are still wandering in, asking for the credit and they’re not shying away when they’re told “we are back to business as usual,” Shanaberger said.
He said Manor Homes now has 59 houses under construction, keeping between 75 and 100 laborers at work on the job site and generating business for subcontractors and suppliers.
“Our agents all have appointments and we’re seeing the sales continue,” he said.
Shanaberger and other builders expect new-home buyers will still be attracted to rock-bottom prices and lower mortgage interest rates while they last.
For example, Vancouver-based AHO Construction is selling entry-level homes starting at $159,000 and $175,000, price points that were unheard of during the housing boom that ended in the third quarter of 2007. At that time, even starter homes were selling for more than $200,000.
“We haven’t seen prices this low in more than five years,” said Gregg White, sales manager of the company, which is building in four Clark County subdivisions.
The low price points are possible as land values have dropped by at least 45 percent, White said. That means 5,000- to 6,000-square-foot housing lots are selling for about $65,000 today, down from $110,000 to $115,000 at the height of the market, White said.
“That’s really the only savings,” he said, adding that costs for building permits and some materials have increased.
With the rebound in sales, competition is also heating up between builders, especially those with properties in sought-after markets, such as the entry level.
“The builders that survived the economy are offering product in the more affordable range, so it is competitive out there, yes,” White said.
And while real estate experts aren’t sure how long low mortgage interest rates will last, some builders say they are encouraged to see banks beginning to offer a range of competitive financing products. White said the programs help a range of buyers who now suffer with greater limits on their access to credit
“Some of our lenders are offering zero-down financing,” White said, “that’s really helping our buyers.”
