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Archive for Saturday, January 16, 2010

Housing starts, optimism trending up

Foundation still weak in other segments of construction

A contractor walks out of a home under construction in the 3900 block of Bellflower, just west of Monterey Way. Housing starts were up slightly in Lawrence last year, but the overall construction industry remained weak.

A contractor walks out of a home under construction in the 3900 block of Bellflower, just west of Monterey Way. Housing starts were up slightly in Lawrence last year, but the overall construction industry remained weak.

January 16, 2010

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New home owners dropped in '09

The local housing market took a hit in 2009 but is looking to bounce back in 2010. The city typically sees about 300 new homes built each year. Enlarge video

Yearly totals

Here’s a look at the total number of single-family homes and duplexes built in Lawrence, plus the total value of all construction projects started in past years.

• 2009: 126 permits; $75.3 million.

• 2008: 114 permits; $146.5 million.

• 2007: 175 permits; $104.4 million.

• 2006: 275 permits; $171.4 million.

• 2005: 305 permits; $131.2 million.

• 2004: 423 permits; $117.7 million.

Housing starts in Lawrence rose slightly in 2009, according to new year-end figures released by the city. But local builders said it was still one of the toughest years on record.

“About once a month, you heard of another company that just wasn’t building anymore,” said Lee Queen of Lawrence-based Edmondson Construction.

Builders took out permits for 126 single-family homes and duplexes in 2009, up from 114 in 2008. But the numbers were far off the levels seen just five years ago, when builders constructed more than 300 single-family homes and more than 100 duplexes.

For many builders, the year felt excruciatingly slow at times.

“We didn’t pull our first single-family permit of the year until November,” Queen said of his company.

Instead, many builders are staying in business by doing small remodeling jobs — everything from hanging a door to building a backyard fence, Queen said.

Bobbie Flory, executive director of the Lawrence Home Builders Association, said optimism levels are starting to rise somewhat in 2010. She said continuation of an $8,000 federal tax credit for first-time homebuyers and the creation of a $6,500 tax credit for certain repeat homebuyers are expected to increase activity in the real estate market.

“We feel like it will increase again in 2010, but it will be a gradual, steady increase,” Flory said. “We’re not going to turn around on a dime and start building 400 houses a year again.”

Although single-family and duplex construction numbers rose slightly, other building totals fell in 2009. Among the information in the year-end report:

• Total value of all construction projects fell to $75.3 million, down from $146.5 million. City officials said a lack of large commercial construction projects led to the decline. This was the first time since 1992 that fewer than $80 million in construction projects were started in Lawrence.

• Permits for new apartments fell to 172 units, down from 557.

• Building permit fees collected fell to $562,262, down from $797,232. The decline in fee collections left the city about $185,000 short of its budget projections for the department.

The downturn has robbed the city of what many considered to be the community’s second largest industry — trailing only education, Flory said.

“You have so many people who are used to making a living in the construction industry, and now they are having to find something else to do,” Flory said.

Comments

jennymassa16 5 years ago

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leedavid 5 years ago

Uh...Chad: Your title says regarding housing, optimism is trending up.

You end your article with: "The downturn has robbed the city of what many considered to be the community’s second largest industry — trailing only education, Flory said.

“You have so many people who are used to making a living in the construction industry, and now they are having to find something else to do,” Flory said."

This is optimistic how?

just_another_bozo_on_this_bus 5 years ago

"The downturn has robbed the city of what many considered to be the community’s second largest industry — trailing only education, Flory said."

The "robbery" wasn't robbery, at all. The downturn in housing starts is the inevitable result of the collapse of the nationwide housing bubble, which exposed the fact that Lawrence has been overbuilt in new houses and apartments over the last decade or more.

leedavid 5 years ago

Bozo:

"The “robbery” wasn't robbery, at all. The downturn in housing starts is the inevitable result of the collapse of the nationwide housing bubble, which exposed the fact that Lawrence has been overbuilt in new houses and apartments over the last decade or more."

I agree. I am pretty sure we don't need anymore apartment complexes. LOL! Good grief. West Lawrence has a load of new homes that are not moving. If we had more jobs, maybe we would sell more homes...but that is not happening either.

sourpuss 5 years ago

Too bad they keep building ugly houses, if the picture is anything to go by.

Richard Heckler 5 years ago

"Boom Town Economics" always crashes. Simply not real and not sustainable. Guess what that boom town stuff promotes inflation aka illusion.

The taxpayers get hit with bogus real estate values thus higher taxes. Small business downtown retailers were hit hard as well... with inflationary taxes.

Yet the new building continues as if nothing happened. Sorry folks flooded markets cost taxpayers way too much money. Continued over building will not solve any problems. Just cost taxpayers more money and further depreciate property values.

BTW is anybody paying property taxes on empty real estate? If not why not?

Lawrence,Kansas does not more bedrooms or any more "boom town economics".

Housing should NOT be a primary industry especially in a small town without good jobs.

Richard Heckler 5 years ago

Let's get real:

Economic Comeback Slow

Speaking at American Economic Association's mammoth yearly gathering, experts from a range of political leanings were in surprising agreement when it came to the chances for a robust and sustained expansion:

They are slim.

Many predicted U.S. gross domestic product would expand less than 2 percent per year over the next 10 years. That stands in sharp contrast to the immediate aftermath of other steep economic downturns, which have usually elicited a growth surge in their wake.

"It will be difficult to have a robust recovery while housing and commercial real estate are depressed," said Martin Feldstein, a Harvard University professor and former head of the National Bureau of Economic Research.

Housing was at the heart of the nation's worst recession since the 1930s, with median home values falling over 30 percent from their 2005 peaks, and even more sharply in heavily affected states like California and Nevada.

The decline has sapped a principal source of wealth for U.S. consumers, whose spending is the key driver of the country's growth pattern. The steep drop in home prices has also boosted their propensity to save.

"It's very hard to see what will replace it," said Joseph Stiglitz, Nobel laureate and professor of economics at Columbia University. "It's going to take a number of years."

One reason is that U.S. consumers remain heavily indebted. Consumer credit outstanding has fallen from its mid-2008 records, but still stands at some $2.5 trillion, or nearly one-fifth of total yearly spending in the U.S. economy.

Another is that many of the country's largest banks are still largely dependent on funding from the U.S. Federal Reserve and the implicit backing of the Treasury Department.

Kenneth Rogoff, also of Harvard, argued that if the U.S. government ever "credibly" pulled away from its backing of the financial system, then a renewed collapse would likely ensue.

He cited government programs giving large financial institutions access to zero-cost borrowing as artificially padding their bottom lines.

"There's something of an illusion of profitability," he said.

http://www.reuters.com/article/idUSTRE6021LK20100103?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28News+%2F+US+%2F+Business+News%29

puddleglum 5 years ago

i thought we could use another 3000 or so apartments.

the houses built out west are just incredibly built.

check out the foundations of the modern houses out here:

walls with 3-layers of concrete! (too many hours between the pours and way way WAY too much water in the mix) weak, porous and just reflective of the 'craftsmanship' of these builders. Of course, these builders have zero pride in their craft. whatever makes a buck=mexican labor check out the trim in these new houses. especially in the bathrooms! looks like someone forgot their beveled-cut mitre saw. and tile work?!
don't take my word for it: have a neat saturday and go out and look at these new houses for yourself. you will see. oh, and every one of them has that stupid gas-fireplace that encourages a waste of.....gas! I wonder how many games of golf the gas company had to pay for in order to get the builders to include these abortions in every single one of these houses. Its tough. yeah, old houses leak and contain lead paint and ya-da-ya, but give me a break, the modern standards for house building are very very very low!

puddleglum 5 years ago

yeah, its pad'ed barry. thanks for the thoughts.

I still haven't got my handout...what gives?

puddleglum 5 years ago

funny how similar PAD is to socialism, isn't it?

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