Alachua County home construction still dropping

The number of permits being pulled is down 83 percent from its peak in 2004.

Eugene Wood, an electrician with Del-Air Electric, wires a new home in Willow Oak subdivision located at Archer Road and SW 88th Street Wednesday, January 19, 2011.

Doug Finger/Staff photographer
Published: Wednesday, January 19, 2011 at 4:37 p.m.
Last Modified: Wednesday, January 19, 2011 at 4:37 p.m.

New home construction continued to drop in Alachua County in 2010, even as builders statewide and nationally saw signs of slow recovery.

Builders in Alachua County pulled 235 permits for single-family and multifamily construction last year, a drop of 26 percent from the 319 permits in 2009, according to numbers from Alachua County and the city of Gainesville.

The drop is even more dramatic — 83 percent — from the peak of 1,385 permits in 2004.

Nationwide, the Commerce Department reported Wednesday that builders broke ground on 587,600 homes in 2010, up from 554,000 in 2009 — the lowest in more than 50 years of records, according to The Associated Press.

In Florida, housing starts were on pace for 40,800 through October 2010, up from 32,200 in 2009, according to the National Association of Home Builders. However, Realtors reported slower sales for the remainder of 2010 since tax incentives expired.

A high number of foreclosures and short sales at low prices are also disrupting sales of new homes, said Realtor Dawn Johnson of Prudential Trend Realty.

She has several listings of new homes in Willow Oak Plantation in southwest Gainesville for Sapphire Builders. The three-bed, two-bath homes with granite counters, ceramic tile and stainless steel appliances are listing for $159,900 — a price they are able to offer since the builder bought the lots for $30,000 less than other lots because the seller needed to unload them, she said.

Still, Johnson said sales dropped from 50 before the tax incentive deadline in April to just four or five since.

"I don't even know what this year is going to hold. It's looking pretty slim unless something happens, unless there's a drop in interest rates or we do another tax incentive," she said.

At the higher end of the market, builder Barry Rutenberg of Arthur Rutenberg Homes said his sales have been gradually improving from his "most challenging" year in 2008 and he expects the "measured recovery" to continue this year.

He said most of his buyers are people who are already in the local market or have some familiarity with it, have job security and are motivated to buy a new, more energy-efficient home with new materials at a lower price without having to worry about the problems that can accompany foreclosured properties.

"The hesitation is in confidence," he said.

While his sales are moving up, Rutenberg said his profits on sales are lower since prices are down even as the cost of materials is up.

Rutenberg is vice chairman of the National Association of Home Builders and said the mood at the recent conference in Orlando is that the industry is in recovery, though the first half of 2010 was better than the second half as the recovery slowed.

The NAHB has forecast accelerating housing starts for the U.S. and Florida for every quarter through 2012.

The slowdown in home construction has resulted in the loss of 2,100 construction jobs in the Gainesville metro area since 2006, a drop of 32 percent, according to the Florida Agency for Workforce Innovation. Statewide, 48 percent of construction workers lost their jobs during that period, a loss of more than 322,000 jobs.

The county's growth management department — funded by permit and inspection fees — dropped from 62 to 51 jobs, according to Assistant Director Rick Wolf.

He said he sees signs that business might pick up again with projects preparing for development review.

Gainesville Building official Doug Murdock said commercial permits are starting to pick up and he anticipates a busier June when many projects tend to get under way as summer starts.

His office has gone from 8 to 10 new home permits a month to anywhere from zero to just a few in recent months, but they haven't lost staff as inspectors and plans examiners are busy with remodels.

The city had 15 new home permits in October, a high for the year, but just three since.

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