The home construction business in the Lynchburg area has started to rebuild, but it is nowhere near as active as it was before the recession.
The federal tax credit for new homebuyers helped bring customers to some local custom homebuilders before it expired April 30. Nationally, new home construction dropped significantly after the credit expired, but local builders said they did not see a huge decrease in May.
Terry Morcum, president of the Home Builders Association of Central Virginia, said new home construction this year has been stronger than last year locally. But, he said, more business is needed.
“It may have picked up a little bit, (but) it’s still not where we were a couple of years ago. Not even close,” he said.
Data for new home sales are not available in the Lynchburg region.
Building permits provide the best market indicator locally.
In the Lynchburg region, 63 building permits for new residential construction were issued in April, down from 66 in April 2009. Then growth was seen in May: 79 permits for new residential construction were issued, compared to only 62 in May 2009.
Those numbers show how much home construction has slowed since the economic downturn began. In the first six months of 2006, more than 100 building permits were being issued in the Lynchburg area each month.
Nationally, home construction slowed significantly in May, which was attributed to the tax credit deadline.
Building permits fell to a one-year low and housing starts, which count the start of construction on residential units, dropped 10 percent in May according to the Associated Press.
Dan O’Neil, owner of Shamrock Construction, said the federal tax credit for homebuyers seems to have helped his business.
“We definitely saw an increase in our number of sales back in the spring,” O’Neil said. “I experienced eight or nine sales and subsequent closings from December into the end of April, early May.”
Overall, O’Neil has built and sold 12 homes in the first half of 2010, which is significantly more than in early 2009, he said. He saw a slight drop in business when the April 30 deadline passed.
Morcum said the tax credit was a boon to people who build homes for $200,000 or less. He said he specializes in more expensive homes, and hasn’t had as many new home projects this year.
“We’re doing a lot more additions, remodels, garages, finishing people’s basements, things of that nature,” Morcum said.
Email
Facebook
Google
Twitter
Favorites
More
Advertisement