Residential permits up but long climb still ahead
Single family construction permits are up in Cape Coral and unincorporated Lee County, but they are still nowhere near the levels of “normal” times prior to the boom, according to one builder.
Bob Knight of Paul Homes said Friday that the number of permits pulled in FY 2010 in Cape Coral — 223 –offers glimpses of recovery, but the reality is that the construction industry still has a long way to go before a true sense of normalcy is regained.
“No builder is building at the pace they used to. We’re seeing an increase, but it’s slow,” Knight said. “We’re moving in the right direction. For a while it was just freefall.”
Some 7,694 single family home permits were in pulled in Cape Coral in 2005, during the height of a boom that some thought would never end.
Knight says 2001’s numbers, when 2,019 permits were pulled, are considered “normal”, while 2005, now six years later, seemed like an omen no one wanted to admit they were catching glimpses of.
Yet, despite construction and housing markets still trying to find their way locally, Paul Homes bucked that trend by deciding to build a model on Cape Coral Parkway.
Knight said the company had been looking to build the model since late 2009, and felt that 2010 was the right time to push their product in the marketplace.
As more of the “prime” foreclosure properties have been snatched up, Knight said Paul Homes began to realize there were a number of buyers out there who didn’t want to take a chance on what remains of the foreclosure inventory.
With reduced lot and construction prices, Knight said new construction is a no-brainer for some buyers.
“The good ones are gone,” Knight said of foreclosures. “A lot of money has to be put into it and a lot of the time you don’t know what you’re getting. With new construction, you’re getting what you want instead of settling.”
Between December 2009 – 2010, 404 single family home permits were pulled in unincorporated Lee County, according to Joan LaGuardia from Lee County Department of Community Development. Those permits were valued at $80.8 million, she said, and equate to a 16 percent uptick in single family permitting.
Through Jan. 27 of this year, 32 single family permits valued at $5.6 million were pulled. Jan. 27 of 2010, there were 34 permits pulled, according to LaGuardia.
She said the numbers were still “pretty flat”, but increases in all permitting categories, not just single family, proves that the year-over-year numbers are a fluke.
Increased permitting in additions (29 percent), interior remodels (14 percent), pool enclosures (25 percent) and multi-family units (17 percent) are encouraging, she said.
“As you look across the spectrum, there is a consistent uptick,” she said. “When everything is up in similar range, that’s something significant.”
Like Bob Knight, LaGuardia thinks the days of finding a “dream home” through the foreclosure boom are over.
“People really bargain hunting for a lovely home… those prime properties have been sold,” she said. “There are new ones (foreclosures) coming on, but they’re not the vacant spec homes.”
Cape Coral issued 442 single family addition or remodel permits in 2010, nearly double 2009’s numbers, when 286 permits were issued.
Cape Coral Construction Industry Association Executive Director Heather Mazurkiewicz said many of the association members are doing remodel or addition work.
Some are even going outside the county and the state for work to stay viable, she said.
There is some renewed hope with their Builders Showcase, which will return for the first time since 2008.
Mazurkiewicz said the CCIA is trying to reaffirm the hope that the worst has passed for the industry, one of the main reasons why the showcase is more important than ever.
“We have members coming to us and requesting to do the showcase, even if it wasn’t on the grand scale it was previously,” she said. “We want to portray a positive image of Cape Coral, we want to talk about the opportunities that exist.”
One of the opportunities that arose from the bubble bursting, however unforeseen it might have been, has been the opportunities for builders to find ways to run their businesses more efficiently, and pass those savings along to the customer, according to Bob Knight.
Knight said the lessons learned from the boom and bust have been “painful”, but companies took the opportunity to catch their breath and reorganize.
Response to Paul Homes’ model has been good, he added, leading to 14 new homes in 2010 for the company.
Like other companies, Paul Homes got involved in remodel work, but is still hoping that 2011 will continue an increase in new construction. Even if the uptick is slight, the further Cape Coral gets away from the bust, the better he said.
There is demand for new construction, even if its not what it used to be, or never was.
“There’s a pent-up demand. There are people out there wanting to move forward with new construction,” Knight said.
Paul Homes new model home is at 1406 Cape Coral Parkway West.