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Housing construction surges in first quarter

A home under construction in Berwick Downs. A home under construction in Berwick Downs.

Tedd Pearce, owner of Tar Heel Construction Inc., has seen boom and bust in the home construction business.

The period we’re in now is neither, and he says that’s probably a good thing — if the period just before the recession is the model of a boom.
“We could use more building activity here,” he said. “I don’t think anyone wants to be back in 2006 and ’07 because it was just too crazy.”
If the pace is short of crazy, there is little doubt that 2015 is seeing a steady increase in construction, including a big jump in housing starts compared to last year.
New home construction more than doubled in the first quarter of the year while construction projects and overall value of residential and commercial jobs also showed strong gains, Henderson County Inspections Department records showed.
Contractors pulled permits for 92 new residential units in March and 140 so far this year, up from 60 in the first quarter of 2014. New commercial projects also doubled in the first quarter, with 19 jobs compared to 10 in the same period a year ago. Residential additions and remodeling fell by 17.5 percent while commercial remodeling rose by 20 percent.
“For us things are going quite well,” said Jim Robertson, general manager of Pro-Build, a building supply company on Asheville Highway. “We’re trending up. Between consumer confidence and builder confidence, things are going real well. There’s a still a lot of remodeling going on.”
The value of new residential construction, at $24.7 million, increased by 62 percent while commercial work, valued at $4.9 million, fell by 54 percent. Overall, new construction work, valued at $29.6 million, increased by 13.8 percent in the first quarter.
For the first three quarters of the 2014-15 fiscal year, new residential construction was up by 14 percent and new commercial work climbed by 43 percent. New construction overall was valued at $85 million for the nine-month period, an increase of 8.1 percent over the previous fiscal year.
“The economics looks better, for sure,” Pearce said. “The housing starts are a good indicator, of course.”
Pearce is a past chairman of the Henderson County Planning Board and president of the Henderson County Homebuilders Association, which has about 90 members. Like real estate agents, contractors are seeing buyers and banks behaving more cautiously than they did 10 years ago.
“The ones I’ve talked to are all grateful for more work and all could probably use more work but are grateful for what we have right now,” he said. “I think everybody I’ve talked to would say their average sale is down compared to what it was in 2006 or ’07. A lot of builders are experiencing people with lower budgets than they had before the great recession. There’s a lot of people looking at more affordable housing. I wouldn’t be surprised if you’re seeking more permits under $300,000 than you would have seen in 2007. To some degree if you look at the number of permits, those are up. I don’t think there are as many of the larger homes.”
Whether they’re building new or buying existing homes, buyers are looking for a more affordable price.
“Some realtors I’ve talked to are moving a lot of smaller houses and when you talk to them they don’t feel like they have enough inventory,” Pearce said. “There’s not much speculative building going on. That may change but people are still smarting with what they got stuck with before. I suspect the banks would still be a little gun shy. Most of us are working presold right now. I think the economic picture is definitely encouraging. I think the general is much more positive, much more optimistic.”