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Archive for Saturday, July 24, 2004

Housing starts sputter in first half

Builders blame lack of space, lumber costs

July 24, 2004

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Lawrence homebuilders are off to their slowest first-half start since 1987.

Through the first six months of the year, builders started just 132 single-family homes, down 15 percent from a year earlier and down 23 percent from the five-year average, according to building permit data from the city.

Builders blamed a shortage of buildable lots and high lumber prices up about 25 percent in the past eight months as possible reasons for the decline.

"The good news is that the buyers are still out there," said Heath Seitz of Lawrence-based Heath Seitz Construction. "People still want to live here."

He said area developers were starting new developments that would ease the shortage of lots.

Seitz Construction will help build a new housing development just south of Kansas Highway 10 near the O'Connell Road intersection in eastern Lawrence.

That project, slated to begin later this year, is scheduled to add about 300 lots for single-family homes and townhomes. In addition, planning has begun for new residential development on 160 acres farther east of the O'Connell Road area.

"I think a lot of builders have become concerned about the shortage this year, but I think we're all hoping that once the areas out east open up that we'll start seeing some relief in the next couple of years," Seitz said. "I actually think we have some pretty good years ahead of us, if the interest rates stay low and the fuel prices don't get too crazy."

In June, builders started 23 single-family homes, unchanged from May but up from 22 in June 2003.

Duplex construction also is lagging.

So far this year, builders have started 29 duplexes, down from 51 a year ago and an average of 46 for the past five years.

The slow start for residential construction has translated into lower building totals overall. For the year, city officials have issued permits for projects valued at $60.46 million. That's down from $76.96 million during the same period a year ago and down from the five-year average of $69.13 million.

The total for this June was $12.98 million, down from $16.45 million in May but up from $9.15 million in June 2003.

The month's totals were boosted by a $4.4 million project at Amarr Garage Doors in the East Hills Business Park. The previously announced expansion is expected to add 80 jobs at the plant during the next three years.

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