Local builders see market upswings

Wendell Olson believes the tide is turning in the new construction market, and that's a good thing.

The Viking Construction president said his company built about 100 homes in the region last year. It plans to construct about 130 in 2011.

"The time for purchasing a new home is now," Olson said. "Prices are lower and interest rates are appealing. When you put those two together, it's a good time to buy. By the second quarter this year things will start to pick up."

Demand for new homes also appears to be on the upswing.

Todd Stam of Aspen Homes said foot and Website traffic of people hunting for homes is up 30 to 40 percent compared to last year.

"That's a huge indicator to me that something is changing," Stam said. "I think the market is improving. People are still shopping - they're definitely not in a hurry and making sure they get the most bang for their buck - but it's a buyers' market."

He said his firm has had eight new housing starts this year, which is slightly ahead of its average for this time of year.

"Typically, on a given year, we only have five or six at this point," Stam said.

Stam said many people are jumping on foreclosures or short sales, but don't realize that there's also deals with new construction.

He said about half of Aspen's projects lately are being built on property that was owned by a bank. The result can be a 50 percent savings, he said.

That, coupled with building costs being down 10 to 20 percent, can mean that home buyers can get into a home for about the same or even less than a foreclosure or short sale, Stam said.

New homes also come with warranties and people get what they're looking for rather than buying just for the price. Foreclosures can also mean out-of-pocket costs for repairs and take awhile to close, whereas homes can be built in three to four months.

"Now is the time to build," Stam said. "Land is at an all-time low and materials and labor are also down. Once people come in and we can explain that, we have a pretty good success rate. It's all about education."

There's other signs of the market rebounding.

Mike Castleman, founder and CEO of Metrostudy, which tracks real-time data of the country's inventory of new homes, said a housing shortage looms that will create a surge in demand for new homes. That's another reason to buy now.

In the 41 cities Metrostudy covers, 78,000 homes are either vacant and for sale or under construction. That is less than a quarter of the new homes that fell into that category during the 2006 boom and significantly below a decade ago.

"If we had anything like normal levels of buying, those houses would sell in two and a half months," Castleman said. "We'd see an incredible shortage. And that's where we're heading."

Olson said he's optimistic the change will be noticeable this year.

"I guarantee it's around the corner, but it's just a matter of where that corner is at," he said.