The pulse of Clark County homebuilding grew a bit stronger in May, as builders provided an outlet for pent-up demand and today’s pickier buyers.
Housing starts nearly doubled in unincorporated Clark County in May, as measured by the 66 permits handed out by the county’s community development department to build single-family houses. Valued at $18.9 million, the permit total increased 94 percent over the 34 permits worth $11.2 million issued in the same month last year.
The total number of home-building permits issued in May represented a 50 percent month-to-month increase over April’s total of 44 home-building permits. That’s still far below the housing boom of the mid-2000s, but few expect a return to that pace of development.
Residential builders who are seeing new business after the four-year-long housing slump are often working at the higher end of the housing market. They also have found ways to stand out from the pack, said Ryan Zygar, owner of Vancouver-based Tamarack Homes and president of the Clark County Building Industry Association.
“We’re rethinking how we can build and now we’re seeing the money come back in,” he said.
Local real estate brokers connect the uptick to demand created by a steadily shrinking inventory of existing, unsold properties. Clark County had a 6.7-month supply of homes listed for sale in April, meaning it would take 6.7 months to sell all of the houses for sale if no inventory was added. It was down from 8.8 months in January, according to Portland-based RMLS.
That has begun to stimulate the market for new houses, said Terry Wollam, a broker with Re/Max Equity Group in Vancouver.
“When there’s less homes to pick from, buyers get frustrated and new construction takes off to meet that demand,” Wollam said.
At the same time, builders say they are still dealing with a buyer’s market, characterized by a smaller pool of people with the down payment and enough credit to buy. Those buyers have specific tastes that are transforming many aspects of the industry, changing everything from subdivision layouts to the designs of individual houses, said Troy Johns, owner of Urban Northwest Homes in Vancouver.
He said some builders have reintroduced larger, single-story houses to appeal to a market of aging baby boom buyers. Others are turning to inventive designs with an emphasis on energy-efficient features.
Homes that cost less to operate are the No. 1 request among persnickety buyers, according to Johns.
“The consumer is now in the driver’s seat,” he said.
Buyers are also demanding more open spaces within their neighborhoods, said Johns, whose company is building houses in nine different Clark County subdivisions with public parks and at least one outdoor amphitheater.
“People want places to gather and a sense of community, which is the new buzzword,” Johns said. Urban Northwest Homes builds in a wide price range, from $199,000 to $750,000, Johns said.
But challenges remain, according to builders and brokers who fear Clark County won’t have enough ready-to-build housing lots to meet future demand as the market recovers. Wollam estimated the county has somewhere between 600 and 900 such lots.
“To some people, its going to sound like a lot, but its not,” he said, adding that a typical housing development can take three years or more to approve.
In the first five months of 2012, county builders have pulled more than 200 permits to construct single-family houses.
“In a three- to five-year period, there’s going to be a significant lack of inventory,” Wollam said.
Meanwhile local builders expect the market to continue heating up over the summer.
“I know a lot of people are getting busier,” said Zygar, a custom builder who is working on two high-end homes. “When I drive into a neighborhood and see five or six houses getting started, I think that’s a very good indication for the market.”