The builders are back — at least for the moment.
The latest construction report from Lawrence City Hall shows that both single family and apartment construction are at their highest levels in at least five years. To top it off, commercial construction — led by public projects such as the library expansion and the public/private Rock Chalk Park development — also are at highs not seen in years.
Lawrence builders in May pulled permits for 15 single family homes. For the year, city officials have issued permits for 74 single family or duplex homes. That’s a 51 percent increase over the 49 homes underway at this time last year. It also tops the previous five-year high of 70 homes in 2010.
I’m sure builders are watching with much interest how the housing market responds to slightly rising mortgage rates. My understanding is rates have topped the 4 percent level, which has caused worries about whether the housing market will sustain its recovery. Who would have thought 10 years ago that 4 percent interest rates would have ever created any type of worry, other than perhaps concern that the champagne shipments couldn’t keep pace with the parties.
The city didn’t issue any permits for new apartment construction in May, but for the year, the market continues to be very active. The city has issued permits for 374 apartment units, a new five-year high and a 103 percent increase from this time last year.
The numbers really get eye-popping when you add commercial construction into the fold. City officials issued a $9.9 million building permit for work on the library portion of the Lawrence Public Library project. A permit for the parking garage portion already had been issued late last year.
For the month of May, the city issued permits for about $16.1 million worth of projects. For the year thus far, builders have started $70.9 million worth of construction. That’s up 71 percent from the $41.4 million worth of project underway at this time last year.
Granted, about $16 million worth of the projects are government or university-fueled projects — $9.9 million for the library and $6 million and counting for Rock Chalk Park — but they are employing builders all the same. And several commercial, private-enterprise projects have been started in Lawrence as well. That continued in May. City officials issued a $1.2 million permit to the Dillons Store at 3000 W. Sixth Street this month. As we reported in November, Dillons filed plans to add a new drive-thru pharmacy lane to the store, at Sixth and Lawrence Avenue. My understanding is that some other interior renovations and landscaping improvements will occur at the store as well, but the overall size of the approximately 60,000 square foot store won’t change. When I get more information about the renovations, I’ll update you with a separate post.
There are other signs in Lawrence that the building economy is starting to pick back up. Two businesses that rely heavily on construction are in the expansion mode.
The first is Pulaski Bank. The bank is headquartered in St. Louis, but has a significant mortgage lending operation in Overland Park and Johnson County. Well, it has now expanded into Lawrence.
The company has opened offices at 3210 Mesa Way, behind the former Lawrence Athletic Club. The banking operations in Lawrence will focus exclusively on home lending. Longtime Lawrence mortgage lender Chris Forbes is running the Lawrence operations for Pulaski. The company currently has two employees at its Lawrence branch, but is adding a third in the next couple of weeks, and hopes to eventually grow to four.
The second is Midway Wholesale at 2711 Oregon Street. The building supply company is adding about 3,000 square feet. Branch manager Joel Dickey said the expansion is designed to give the business better showroom space and more offices.
The business sells a variety of exterior building products, so we’re talking things like roofing, siding, guttering, masonry products and the tools needed to tackle such jobs.
Even though the company’s name highlights the wholesale nature of the business, it doesn’t limit its sales to contractors. Dickey said selling to homeowners has become a larger part of the business. But a Menards or Home Depot it is not. Its business model is different, relying more on customers ordering what they need from the business, rather than picking it up right that minute.
But the company’s Lawrence expansion is a sign that things are on the upswing in the local market, Dickey said.
“It is improving,” Dickey said. “It is not anything like it used to be, but you can see a change coming.”
I don’t know about you, but I’ve been experiencing building permit withdrawal symptoms. Since about June, I’ve been unable to report any new building permit data for you because the city was having some issues with its new permit software and its ability to print reports.
(I’m assuming that is why I’ve had occasional sleepwalking bouts where I end up in my shop with a hammer and a mangled 2X4, but perhaps something else is going on there.)
Regardless, the city has gotten its report issue fixed, and we have new data to share. And for once, there is some good news in it for Lawrence homebuilders.
Through November, homebuilding activity is up about 27 percent compared to the same period a year ago. In fact, the number of single-family and duplex homes are at their second highest total since 2008.
The city has issued permits for 124 single-family or duplex projects, up from 97 in 2011. The 2012 numbers still trail the 157 permits issued during the same time period in 2010, but that was back when builders thought the first-time homebuyers credit had turned the market around. Interestingly, the 2012 numbers are ahead of the 2008 numbers, which is back before the national economy turned sour.
If November is any indication, builders are finishing the year with some momentum. The city issued 15 permits for single-family and duplex construction, which is more than double the average of 5.25 permits for the previous four years. (I feel for that guy who got the 0.25 of a house.)
When you look at the total construction picture in Lawrence — residential plus commercial — the numbers aren’t quite as good. Through November, the city has issued permits totaling $92.68 million, which is down about 14 percent from the same period a year ago. The $92 million mark of this year is still the fourth lowest total of the last five years, coming in ahead of only the dismal 2009 season.
But again, builders had some momentum in November. The city issued permits for $10.01 million worth of projects during the month, including three commercial projects valued at $1 million or more. They were: $1.645 million for the new Briggs Dodge building at 2300 W. 29th Terrace; $1.304 million for a new metal salvage building for Advantage Metal Recycling at 1545 N. Third St.; and $1.304 million for a classroom addition at the St. John School at 1208 Kentucky St.
So far in 2012, the city has issued 16 permits valued at $1 million or more. The other projects are:
• $8.325 million for Westfield Place Apartments, 204 Eisenhower Drive.
• $4 million for the Lawrence Community Theatre, 4660 Bauer Farm Drive.
• $3.986 million for the Varsity House Apartments, 1043 Indiana St.
• $1.9 million for an addition to the Del Monte pet food plant, 727 N. Iowa St.
• $1.5 million for the Lawrence Memorial Hospital North Wing remodel.
• $1.4 million for Raintree Montessori School addition, 4601 Clinton Parkway.
• $1.4 million for the Hy-Vee C-Store, 3900 W. 24th Place.
• $1.3 million for a retail shell building that will house a Papa Murphy’s, a credit union and other tenants at 650 Congressional Drive.
• $1.235 million for a remodel of the Kia dealership, 1225 E. 23rd St.
• $1.2 million for a new Briggs Nissan dealership 2300 W. 29th Terrace.
• $1.1 million for a single-family dwelling at 1714 Lake Alvamar Drive.
• $1 million for a single-family dwelling at 133 Running Ridge Road.
• $1 million for a retail shell building at 4701 Bauer Farm Drive.
Those aren’t bad numbers considering that in future months there will be another $18 million in construction for the Lawrence Public Library project; $10 million-plus for a pair of multistory buildings at Ninth and New Hampshire streets; and perhaps $25 million for a new recreation center in northwest Lawrence.