Archive for Friday, January 20, 2006

Construction slump: Builders expect more sluggish activity

January 20, 2006

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Phil Struble sees Lawrence's $78 million in construction activity during 2005 as a bad sign.

Even worse: It could sag more this year.

With concerns swirling about dwindling sewer capacity in northwest Lawrence, and builders mulling the costs of rising interest rates, the president and chief executive officer of Landplan Engineering is seeing fewer plans cross his desk.

"People are saying, 'Whoa, wait a minute. While I want you to work real hard on getting this online, maybe I ought to take a breather and see what happens,'" Struble said. "We're not hugely optimistic about construction in 2006. It's been low, and the prospects for getting back to where we were two and three years ago are very, very slim."

Lawrence builders, remodelers and others involved in construction trades took out building permits valued at $78 million last year, according to the city's Department of Neighborhood Resources. That was down nearly $40 million from 2004.

The decline spread across virtually every sector of the market, as the city lacked both the major construction projects that had been going up in recent years and the sprawling number of new homes that had been expanding the city's borders.

"In past years, it was crazy," said Barry Walthall, the city's code enforcement manager, who oversees permits. "There's still activity, and there's still a pretty fair amount of activity going on : but the economy's probably had a lot to do with the slowdown we've seen this year."

Struble, whose firm handles land-use planning for the majority of developers in town, said there would be anywhere from 300 to 450 lots available this year for home construction.

"That's compared to about 800 in 2003," he said. "It's a significant drop, and the home-building business, it probably rivals the University of Kansas as compared to employment base - the bankers, the Realtors, the framers, the concrete industry, the paving industry, all those people. And if that number of homes is cut in half, that cuts their business in half. There's just a tremendous economic impact to the city of Lawrence."

Mike Nuffer, who's been building homes in town for 12 years, said he'd been looking in neighboring communities for affordable lots. Prices in Lawrence - $60,000 or $70,000 for a good lot - are becoming too steep to build homes that can sell in a timely manner.

"We keep going up and up," he said, of resulting home prices. "At some point people are going to say, 'Enough's enough. I'm not going to live in Lawrence.' We're definitely pricing people out of the market."

Comments

just_another_bozo_on_this_bus 9 years, 5 months ago

What is with this $78 million figure? Just last week this was corrected upward to $131.3 million. Seems like an important bit of info to have completely wrong, especially when it was corrected just a week ago in this very newspaper.

cowboy 9 years, 5 months ago

its real slow , seems the yuppies are running out of money and having to pay off thier second mortgages , credit cards , no more clinton stock market windfalls.

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