A newly poured foundation for a home can be seen through a new home in Centerra Ridge, a subdivision on Evansville's East Side, Wednesday morning, May 12, 2021. Area home building is up from this time last year and is expected to continue to pick up as the pandemic subsides. Staff photo By Denny Simmons
EVANSVILLE — Despite a months-long spike in the cost of lumber and other materials, homebuilding remains brisk in Vanderburgh and Warrick counties.
Local builders said volume is strong because historically low mortgage interest rates offer plenty of incentive for families to plan a dream home. At the same time, a homebound, COVID-weary public has invested in homes rather than vacations and other expensive items.
Because of the pandemic and other factors, the prices of materials are high, and supply chains are sluggish. Locally, though, builders aren't feeling much of a pinch yet. With rates about 3% now as opposed to 5% in October 2019, plenty of people want to build.
“Lumber prices are up, but affordability is still reachable for people of every price point or income,” said Kenny Reinbrecht of Reinbrecht Homes.
Vanderburgh County had 98 single-family house starts in the first four months of this year, up from 68 during the same period in 2020.
More: Evansville area builders, real estate agents had a busy 2020; here's a look at the numbers
Warrick County saw 88 starts from January through April, compared to 72 at the same time last year.
One hot spot is Centerra Ridge, a subdivision on Evansville's East Side, off Telephone Road.
"That subdivision, we developed a whole back section which is 100-ish lots and were selling them like that (snaps fingers)," said Mike Zehner of Zehner Contracting.
Many homes also are going up in Kinway Park, just outside the city limits between North Green River and Oak Hill roads.
"January, we probably had 30 lots left. We sold our last lot last week," Reinbrecht said of Kinway Park.
The home remodel business is strong, too, for the same reasons.
"There was a slight slowdown the first couple weeks of COVID, when people were afraid to open their doors," said Cougar Martin, vice president of Martin Brothers Construction. "But since then, it's been unbelievable. We can't get back to people fast enough, that's our main problem. (2020) was a record year."
Plus, "it's not just a kitchen anymore," Martin added. "It's a kitchen, all the bathrooms, a deck, do all the flooring upstairs. The scale of the projects has been magnified."
The market for existing houses continues to be tight, with little inventory. Builders said this is giving some residents even more motivation to remodel or build anew.
From a housing standpoint, there's not much in common between the COVID-caused economic downturn and the Great Recession, builders said.
The latter event was largely brought on by a mortgage crisis, and homebuilding plummeted locally and across the country.
"In 2008-09, there were a lot of people buying a second vacation home, and people walked away from them," said Bill Pedtke, executive director of the Southwestern Indiana Builders Association. "That's not happening this time."
Builders said it wasn't unusual during the Great Recession for them to have multiple spec homes they couldn't sell. Now, they said any spec home under construction is snatched up right away.
A supplier to local homebuilders, Niehaus Lumber, says transportation of supplies is a challenge in the current environment. One roadblock is a lack of drivers, as well as companies choosing to have fewer trucks on the road due to government regulations and high fuel costs.
"The biggest concern as a supplier for these guys is to make sure they've got product, and that's causing some issues," said Eric Feagley, the company's general manager. "We're running into trucking problems. I've got three loads of lumber coming out of different mills. They're ready, and I can't get a truck underneath them."
Fact check: COVID-19 to blame for spike in lumber prices, not Biden
What's next, as the pandemic presumably moves toward its end? Homebuilding will likely remain strong for the time being, according to locals in the profession.
Local homebuilding has generally trended up after taking a big tumble amid the Great Recession. New starts are likely to take a big jump in 2021, this after a modest increase in 2020 from 2019.
"As far as the demand is concerned, everything I've seen from our national affiliate is that it's going to be here for awhile," Pedtke said. "I've heard at least a year."
"I think we're good for a couple more years," Zehner said, "unless critical things happen like interest rates spike, or we don't have products to keep people at work."
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