Allen County home builders crept closer toward that magic 1,000-permit mark in 2016 and, although they fell a little short, ending with 942 permits issued, it was the best year the industry has had in the county in a long time.
The total represented an increase of 62 permits, or 7 percent, from 2015; and was up more than 26 percent from the 746 permits issued in 2014. The average permit value rose $9,340, or almost 4 percent.
Across the six-county area covered by the Home Builders Association, which also includes Adams, DeKalb, Huntington, Wells and Whitley counties, builders racked up 1,351 permits, an increase of 12.6 percent, or 151 permits, from the 1,200 issued in 2015.
“It was a record year for us,” said Lonnie Norris, vice president of sales at Granite Ridge Builders.
The company was tops among HBA builders in both number of homes permitted, 229; and dollar volume, $55.4 million. The second busiest builder, Lancia Homes, pulled 130 new home permits and posted a dollar volume of almost $24.7 million.
Granite Ridge also has an office in Elkhart and builds outside the HBA’s area. Its numbers there were a record too, Norris said.
Homes at or near the $300,000 price point were a strong and growing part of Granite Ridge’s business last year, Norris said.
“But we’re kind of like GM. We build Chevies, Buicks and Cadillacs, and all three categories have been strong,” he said.
Matt Lancia Signature Homes finished its first full year in business in 2016 with 18 homes built. Although the homes he has built tend to be at a lower price range than Granite Ridge’s, “a rising tide lifts all boats,” he noted.
Lot availability has been an issue for some builders the last couple years as the old inventory was used up and developers hesitated to invest in new subdivision. Granite Ridge has developed some of its own subdivisions, including a new one in Leo, in Cedar Creek Township, where demand is building, Norris said. Aboite and Perry townships, as always, are the most popular areas for new home construction.
Lancia said lot availability isn’t as much of a problem as lot affordability. Regulations and fees, especially those associated with stormwater, sewer and water connections and other infrastructure, have added a lot to the cost. Huntertown is particularly expensive, he said.
“Prices are jumping. They’re not crawling, they’re jumping,” agreed Charlie Giese, vice president at Westport Homes of Fort Wayne, and fees and infrastructure requirements, not the price of land, are driving up the cost.
“It is ever more challenging to get lots developed, with regulations etc., but we’re getting it done,” Norris said. “We’re in an area where people have jobs, our affordability index in northeast Indiana is one of best in nation.”
The availability and quality of subcontractors is also an issue.
“The labor market is a little bit slim, and it’s been that way for some time,” Norris said. The company is working to expand the number of subs with which it contracts.
“I would say it’s a tight market, but it’s not impossible to find somebody to work for you,” Lancia added.
Westport pulled permits for 98 homes in 2016, with a total dollar volume of about $16.8 million. It has been building more homes at a little higher price point in the last few years, and its sweet spot is now in the $180,000 to $230,000 range, Giese estimated.
“We don’t want to get carried away. We still want to be affordable and have value, and we’ve had some success with that,” he said.
Westport reached beyond Allen County to DeKalb last year, taking over building in the Mason’s Village subdivision, which another builder had left behind.
“We had a fantastic year there, we’re down to our last couple of sites, and we’re getting ready to build in another (subdivision),” Giese said. “Everything we see in our neighborhood and other neighborhoods there, activity is brisk.”
Westport also is building in the usual hot spots, northwest and southwest Allen County. Across the board, larger two-story homes seem to be in high demand, in the 3,000 to 3,600 square foot range, Wiese said.
Granite Ridge also is doing a brisk business in maintenance-free villas, but there’s a new twist. Instead of the typical flat slab, baby boomers are looking for villas built on basements, so they have somewhere to send the grandkids to play, Norris said.
As far as downsizing, baby boomers “say they’re going to downsize but when the smoke clears they’re about the same. It’s more resizing - different rooms, different configurations,” he said.