By CANDACE BEATY GWALTNEY, Daily Journal of Johnson County staff writer
With demand dropping, Johnson County could see the biggest decrease in the number of new homes in more than eight years.
Building permits for new homes issued in Johnson County from January to June dropped about 42 percent compared to the same period last year, according county planning departments.
Builders are not worried, and local planners say it's normal to see ups and downs in permits.
"Consumer demand is down," said Rachel Daeger, spokeswoman for Builders Association of Greater Indianapolis.
Tightened lending policies, depreciating home values and news of foreclosures have led to uncertainty among many potential home buyers, she said.
"The builders have responded to the drop in consumer demand by building less houses," Daeger said.
Last year, the number of permits in Johnson County dropped by about 26 percent from 2005; however, most surrounding counties saw steeper declines.
What seems like a dramatic drop this year may actually be Johnson County catching up with other areas, Daeger said.
Countywide, from January to June, 396 permits for single-family homes were issued. Last year builders granted 686 permits in the same time period, according county planning directors.
For builders who have been in business awhile, this is nothing new.
"You just got to be ready to weather the storm," Greenwood builder Bob Price said.
People are not building new homes because they are having trouble selling their current home, said Price, the owner of Prestige Homes.
"I think everybody is a little apprehensive with the way the market is," he said.
Since a record year in 2005, Greenwood has seen a continuing drop in the number of homes being built.
Greenwood issued 757 single-family home permits in all of 2005, planning director Ed Ferguson said. That's almost twice the number of permits as he expects the city to issue this year.
The then new University Park subdivision accounted for much of the surge that year. In all of 2006, the city issued 237 fewer permits than 2005, a decline that was expected, he said.
This year Greenwood will issue an average of one permit a day, Ferguson said.
History shows the housing market goes in a three- or four-year up-and-down cycle, which means it could swing back up in the next couple of years, he said.
Unlike in 2005, homes now are not concentrated in certain areas. New homes are spread out on the east, south and southwest sides of the city, Ferguson said.
For Greenwood-based builder Mike Gorman, customer inquiries have slowed, but business remains steady.
Few people have showed interest in building new homes, but those who do are serious about building, he said.
Leery of higher tax bills and assessments in other areas, fewer people are looking to move, Gorman said.
Gorman Homes has seen more interest in remodeling projects, such as adding rooms or remodeling kitchens, so homeowners don't have to move, Gorman said.
"Everyone in the industry has obviously taken a hit," C.P. Morgan spokeswoman Blair Kendall said.
The declining market is difficult for builders. Since the drop is caused by external factors such as the economy, C.P. Morgan is not doing anything different, she said.
C.P. Morgan will not share information about the status of projects or figures on home sales, she said. The company is building in the Heritage subdivision in Franklin.
The Center Grove area, though, remains a popular spot. Large subdivision projects are planned for the area.
The Abbey, a 2,000-home subdivision, is planned south of Whiteland Road and north of County Road 350N in Bargersville.
Subdivisions in the town are filling, reducing the number of lots to build on. So far this year, two building permits have been issued, compared to 26 during the same period last year, town manager Mike McCarthy said.
With Clarian's purchase of 158 acres in Bargersville, more commercial building is expected in the coming years, he said.
In Franklin, the number of permits is a little less than last year, planning director Joe Csikos said.
Homes are being built in subdivisions Windstar, Cumberland Commons and Heritage.
Since Franklin Lakes subdivision has filled up, the adjoining Windstar subdivision has become more popular, Csikos said.
No new subdivisions are planned in Franklin, he said.