Indiana counties issued 13,781 new single family home permits in 2011 but the Fayette County Planning office issued only issued four of those.
The housing bubble that broke in 2008 and ‘09 has started a comeback but with the declining population in the county and available stock, home builders are not in the mood to start homes.
Fayette County Area Plannig Director Bill MacDaniel said this year from Jan. 1 to July 1, three single family dwelling stick-built homes and two manufactured homes had been approved. During that same period a year ago, two stick-built and one manufactured home received approval.
“I can remember when I started here in the early 2000s, there were somewhere around 20 a year,” he said. “I could see it decline before it really bottomed out in 2007 and 2008. Some that might have built a house at other times are now just improving what they have.”
Rather than seeing many permits for new housing, the office is receiving requests for upgrading current dwellings with a room addition, garages and electrical upgrades.
The county continues to lose population, which reduces demand for housing, he said. In much of the county, building a house is difficult because of the lack of adequate ground water for wells.
There could be a few more housing requests come in the fall as people want to get a house started and under roof before cold weather or at least get the site preparation work done before bad weather and then start construction in the spring, he said.
Builder Jerry Hathaway said at the present time, he owns seven houses, including his residence, one he rents, two sold on contract, one sold, one for sale and an older home recently purchased at auction to freshen up and then sale.
“There aren’t any new ones,” he said. “I had one on Doe Springs Court last year I built. I built two on Major Drive the year before. One is for sale. If one of the others sells, I may start another.”
An issue for developers is paying for utilities and taxes on a home when the house is empty. Heat, electricity and possibly water must be maintained in order to show the home effectively to potential purchasers, he said.
The good news for developers is that many homes that had been in default have been sold, reducing the housing supply and driving prices higher to make new homes more competitive.
Paul Schwinghammer, owner and president of Hallmark Homes Inc. in Anderson, said the market for new homes has definitely increased as the foreclosures leave the market through sales.
Hallmark Homes is custom building a home on Ranch Court.
The average sale price has gone up considerably, maybe 25 percent in the past two or three years, he said.
Back in 2006 and 2007, people spent more on bigger homes and more amenities. From 2008 to 2011, sale prices went down because people only built the bare necessities.
Homeowners could not add the features and options they may have wanted because valued went down because of the number of foreclosures. Appraisers compare the value of new homes to existing homes, which could be sold for pennies on the dollar. Foreclosures brought down the market value for everyone, he explained.
With fewer foreclosures now and a hotter resale market that has sent markets back up, that has helped new home builders, he said.
“We usually do anywhere from 45-70 new homes but in the 12 months starting January to January this year we’ll be closer to the high end,” Schwinghammer said. “We’ve kind of remained steady but certainly the interest waned. We previously built in the middle two-thirds of the state, but now we expanded the area to include the north and south as well and we’ve been able to maintain a reasonable amount of volume.”
Hallmark Homes usually builds homes in the $200,000 to $225,000 range but the one on Ranch Court is more, he said. The home will be full brick and stone, full basement, two-story with 3,300 square feet of living space and a three-car garage.
“If the jobs come up to Ford (Visteon), that will be bring some jobs,” Hathaway said. “Tractor Supply is coming and that will be good but they’re not going to be high paying jobs.”
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