After the real estate boom
New home starts in Jackson County declined by 23 percent in 2011, according to preliminary numbers reported by the Federal Housing and Urban Development Department.
The federal data base showed 238 single-family residence permits were issued during 2011, compared with 293 in 2010. "It's not a good time for contractors and developers," said Brad Bennington of Bennington Construction in Phoenix, who's also a past president of the Home Builders Association of Jackson County.
To put things into perspective, between 2003 and 2005, there were an average of 1,751 single-family structure permits issued each year in the county. During those boom times, builders couldn't throw up houses fast enough to keep pace with the demand and usually had buyers ready to pounce the moment the foundation was laid.
That has changed.
"You are not going to see many spec homes being built," Bennington said.
For the most part, the only builders who are active are those who were able to buy property at low cost.
"Some builders have acquired land at devalued prices," Bennington said. "The majority of the cost (for a new home) is in the ground and infrastructure. When the lots come out the other end from a foreclosure, the hit has been taken and when there is a qualified buyer, the risk is very small. A contractor can build at competitive price and make a profit."
Bennington said there won't be a change in the new construction trend until foreclosures are no longer a major component of sales. "It's softened prices and made it hard because we don't have (comparative sales) that would support prices," he said. "The comps get lower, and more foreclosures continue to erode prices."
The inactivity has reduced the ranks of contractors, subcontractors and staffs, perhaps by as much as 50 percent, Bennington said. It also has reduced the number of people selling homes. Colin Mullane, a spokesman for the Rogue Valley Association of Realtors, said the number of agents has dropped from 1,150 in 2007 to about 720.
Southern Oregon Multiple Listing Service, which compiles data from real estate transactions, generates reports for existing and new home sales. But the dearth of construction turned the reports into a collage of NAs for "No or Insufficient Activity" during the reporting period.
"Our members don't like to see NAs," said Victoria Simone Stewart, technologist for SOMLS. "We want to show statistics that are useful to our members and the public, and they aren't useful statistics right now. We want to show what's going on in the market going forward."
Reach reporter Greg Stiles at 541-776-4463 or email firstname.lastname@example.org.