New-home starts slump

Published 10:51 am Wednesday, December 28, 2011

Southampton County issues fewest permits in 15 years


COURTLAND—For the first time in 21 years, custom-home builder Jim Hart went the entire year without starting a new home.

“I’ve never had a year like that,” said Hart.

It’s no surprise, given Southampton County experienced a 15-year low for new-home starts in 2011. Through November, there were 39 permits issued for new homes; numbers for December were not available Tuesday. The previous low was 44 new homes in 2010 and 48 in 1997, while new-home starts topped out at 164 in 2005.

County Administrator Michael Johnson attributed the slump to the economy.

“It’s not unique to Southampton County,” Johnson said. “Housing starts are down across the country. There’s a lot of properties on the market. It’s a buyers’ market for real estate.”

The U.S. Department of Commerce recently reported that new-home sales climbed a third straight month during November and came in at the highest level since April. Sales ticked up 1.6 percent. When compared to a year ago, sales spiked 9.8 percent.

Johnson believes the county’s new home situation has hit rock bottom and expects a bit of a rebound next year.

“I don’t expect it to be strong,” he said, who is basing his prediction on what he’s seeing and hearing in the media.

Of the 39 homes permitted in 2011, 22 were of stick construction or modular homes worth a total of $4.4 million. The average home cost $202,153.

Another 16 permits were obtained for single- and double-wide trailers. Valued at a total of $647,000.

The average singlewide cost $14,140 and doublewide, $75,682.

The county also saw the construction of one duplex valued at $256,000.

Beth Lewis, director of Community Development for the county, also attributed the low housing starts to the economy. She is, however, seeing more people making improvements to their homes.

“That indicates there are still improvements being made to their homes,” Lewis said. “Some are increasing the home space by 30 to 50 percent. People are doing master wings, master bedrooms, master baths and sitting areas.”

That’s the type of work Hart, the owner of Hart Construction since 1977, is getting. Whereas he built six custom homes annually in 2004 and 2005, these days he’s keeping his five full-time workers busy on additions and remodeling.

“The reason is the (lower) real estate prices for existing houses,” Hart said. “People can find a house much cheaper. It may not be exactly what they want, but with the prices low enough, they can modify it.”

As for what Hart expects over the next five years . . .

“I don’t know, but I think Franklin will pick back up,” he said. “We’re tied to the global economy and the Western Tidewater economy. We have new industry coming in and more job opportunities.”

“As soon as these foreclosures are weeded out and the market stabilizes between the cost of building and buying, you will see construction building increase,” Hart added.