Howard County home permits hit 26-year low

ken.delabastide@kokomotribune.com

Requests for permits for the construction of new houses in Howard County are at a 26-year low, but permits for remodeling work remain about the same as in recent years.

Last year, permits were issued by the Kokomo-Howard County Planning Commission for the construction of 19 new houses in Kokomo and 29 in the remainder of Howard County.

"It is the lowest since 1982," Glen Boise, director of the Kokomo-Howard County Planning Commission, said Friday. "The numbers are about the same for 1982 and 2008."

Through January, no permits had been issued in Kokomo or Howard County for the construction of a new single-family residence, Boise said.

The peak period for new home construction was in the mid-1960s, then following a lull in the 1980s, there was another increase in single-family home construction from 1999 through 2002.

"Back in the 1960s, the first Chrysler plant was being built in Kokomo so people were being hired and moving into the community," Boise said. "In 2001, Delphi [Delco] was expanding and hiring, and Chrysler built the Indiana Transmission Plant. People were moving into the community and building new homes."

Boise said traditionally there has been more home construction in Howard County than inside the Kokomo city limits.

"During the two previous administrations, the city was not as aggressive on annexation," he said. "The city was providing sewer service to areas outside the city limits, which encouraged the development of several subdivisions."

This past week, President Barack Obama signed the "American Recovery and Reinvestment Act of 2009," which provides an $8,000 tax credit for buyers who purchase a home between Jan. 1 and Dec. 1. The tax credit doesn't have to be repaid.

Mortgage rates on Friday were at 5.04 percent for a 30-year fixed mortgage and 4.68 percent for a 15-year fixed mortgage.

Gary McKibben, vice president of McKibben Construction, said the current period of time for home construction is worse than when mortgage interest rates were at the 16 and 17 percent levels.

"I don't know how much of the [federal] stimulus package will trickle down to Howard County," he said. "It seems more geared to the larger cities."

McKibben said current interest rates are low, but if people aren't working they are not going to build a new home.

"Last year, I had a good year remodeling," he said. "People are looking to upgrade their current homes."

McKibben said although the company, which was started in 1967, and is known for building custom homes, he is looking for any type of business.

Dan George, sales manager for Bergstrom Home Improvements, said the company does every type of remodeling work and has built some custom homes in the past.

"It is a blessing that we are so diversified," he said. "If we specialized in one area, we would be in trouble."

George said he has found people that are remodeling existing homes instead of building new.

"Some people have tried to sell and when they can't they decide to fix up where they're at and stay," he said. "If they like an area or the neighbors, they want to stay and not relocate."

George said interest rates on mortgages and second mortgages right now are very good; however, he isn't sure whether it will help the real estate market.

"It's too early to tell," he said of 2009, "it might not be that great a year. It may be 2010 before things turn around."