The local building industry has finally hit a sweet spot — below the boom and above the bust.
From the building boom that peaked in 2005 to the nose dive into 2011, area builders say the steady rise in housing starts the past two years have landed the perfect happy medium.
“The boom isn’t healthy because it’s always followed with a bust,” said Scott Krajack, estimating manager for Viking Construction. “We’re having a nice, steady growth spurt — and at a comfortable pace.”
Krajack said consumer confidence, helped by a flushing of the foreclosures the past two years, and low interest rates have fueled the rise of the market.
Viking’s Cottage Grove, a gated community in Coeur d’Alene with homes starting at $189,968, capsulizes current industry, he said.
“We haven’t finished the model home and we’ve already sold three homes in there and there’s an offer on a fourth,” Krajack said. “This project sat vacant three and four years ago.”
Todd Stam of Aspen Homes said his company is also seeing a rise in the higher-end market.
“Eight of our projects are over $1 million,” Stam said. “Last year at this time we had one of those. The market is healthy.”
Stam said Aspen has sold two speculative, or “spec” homes, valued at more than $1 million this year. Spec homes are built on the speculation that someone will buy them when construction is finished.
“We hadn’t sold one of those in four years, so that shows you people are shopping for higher value again,” he said. “You couldn’t sell a spec home a few years ago. When the spec market comes back, that’s a good indicator that people are shopping.”
Stam believes the momentum will carry over to the winter months — more so than previous years.
“We’ll be digging this fall and expect to have 20 projects to work on all winter,” Stam said. “Typically, we don’t have that much.”
He said the only question is how long the run can be sustained.
“There’s a lot of new buildings going up, but there are still a lot of gun-shy developers,” said Stam, referring to how some developers lost projects during the recession. “The inventory may dry up. There’s not a lot of annexations going on and there could be a frantic frenzy to get more building lots in six months to two years. If that happens, it could turn to more of a seller’s market than a buyer’s market.
“There’s already smaller builders that are scrambling to buy lots. If we’ll have the inventory, we’ll be in good shape. If not, it will get tricky.”
Power in the numbers
Area city and county building departments report a dramatic rise in building permit numbers this year.
In Coeur d’Alene, through June, the latest stats available, there had been 181 permits for new single-family homes issued for the fiscal year compared to 88 last year at that time.
Commercial permits rose from five last year to 17 this year.
“Our current building permit numbers are running close to 2008, which was toward the end of the previous building boom,” said Ed Wagner, Coeur d’Alene’s building services director. “Normally we see a rise in either commercial or residential, not both as we are currently experiencing.”
Wagner also expects construction activity to continue strong in the months ahead.
“We do not anticipate much of a building slowdown, if any, through the summer and into the winter months,” he said.
In Post Falls, through July, 131 permits for new single-family homes had been issued compared to 93 last year at this time.
On the commercial side, five permits have been issued versus seven last year at this time.
“Overall, I think this year’s numbers will equate to last year’s,” said Russell Cornell, Post Falls’ building official. “Our residential new construction seems to have leveled off for the summer.”
Kootenai County had issued 119 single-family home permits through July 31 vs. 78 at this time last year. New commercial building permits have fallen from 17 last year to six this year.
Rathdrum’s single-family home permits this year (25) have already passed last year’s year-end total (24).
Total year-to-date permit numbers hadn’t been compiled by Hayden as of last week.
Krajack and Stam said housing starts for their construction companies are up about 25 percent from last year.
“This year we expect to have between 160 and 175 homes,” Krajack said, adding that Viking’s total last year was 120 and two years ago 80.
A ‘Smart’ project in Post Falls
Among the current building activity is a five-unit residential project on Fourth Street just east of Post Falls City Hall. It is a new vision for an old part of the city.
Being developed by Cathy Retallick of Coeur d’Alene, it is the first residential infill project with Smart Code zoning to be constructed in the city center. The Smart Code was adopted four years ago to allow for high-density development and create live-work areas.
The project includes two duplexes, a single-story home and covered parking in the back.
It is set back only about 10 feet from the sidewalk and 3 feet from the property lines to the sides.
Completion is slated for this fall.
“We are hopeful that the Retallick project will spur other residential infill projects in the city center area of Post Falls,” said Hilary Anderson, the city’s planning manager.
Parade of Homes starts Friday
- The North Idaho Building Contractors Association's Parade of Homes will be held Friday through Aug. 11, and Aug. 16-18.
Tickets, available at the NIBCA office at 1928 N. Fourth St. in Coeur d'Alene, are $5. The new homes will be open 1-7 p.m. on the Fridays, 11 a.m. to 6 p.m. on the Saturdays, 11 a.m. to 6 p.m. on Sunday, Aug. 12, and 11 a.m. to 4 p.m. Sunday, Aug. 19.
A special Parade of Homes section will be published in Thursday's Press.