Lawrence building climate begins to show signs of turnaround

Thursday, September 17, 2009

A series of new numbers have Lawrence builders and real estate agents harboring a little hope that the city’s housing and construction markets are inching upward.

A new report from City Hall shows that Lawrence builders have started work on 73 new homes in the last two months, the highest two-month total since early 2007.

“I would say the market has stabilized,” said Gary Nuzum, senior vice president with McGrew Real Estate. “I think we’ve seen the bottom.”

New development applications also are showing some signs of recovery. In the last week, the city has received applications for two multimillion-dollar apartment complexes.

Lawrence developer Michael Stultz has filed a site plan and rezoning request for a $6 million project that would add 164 single-bedroom apartments to the southeast corner of Clinton Parkway and Inverness Drive. He hopes to start construction as soon as the project wins city approval. Planning commissioners are scheduled to consider the project at their Monday meeting.

“Quite frankly, I have a lot of subcontractors who want to go to work,” Stultz said. “Prices are right in that manner. From that standpoint it is a good time to build.”

Activity on a previously approved golf course and apartment project also is taking place. A final development plan has been filed for The Links, a 480-unit apartment project that would be built around a proposed nine-hole golf course near Sixth Street and Queens Road.

City commissioners approved the zoning for the project — which would include 40 buildings spread over 80 acres — in February 2008, but the project never started construction. A representative of the Arkansas-based developer said his company recently finalized the purchase of the property and could begin construction next spring.

On the real estate front, Nuzum said activity still remains weak for houses priced above $250,000, but he said homes priced below that point have started to sell much better recently.

He said the federal government’s $8,000 tax credit for first-time homebuyers has brought new buyers into the market as they’ve become more familiar with how the credit works.

“The $8,000 credit is just like cash,” Nuzum said. “It is not a deduction. If you got a $2,000 refund back from the government last year on your taxes, it would be $10,000 with this credit.”

New numbers from the Douglas County Appraiser’s office also suggest some improvement in the market this summer. Since July 1, the office has recorded 150 existing home sales, and the average selling price for the homes is up 5.3 percent from the 2008 average. The average selling price since July 1 has risen to $187,684.

Development leaders also are pointing to the single-family building permit totals. Currently Lawrence builders are on pace — barely — to build more homes in 2009 than they did in 2008. If that happens, it will end a stretch of three years of declines in the single family market.

“It is better than it was,” Nuzum said. “We’re hoping this fall will be a better market than last fall, which was a disaster.”