Local home construction down 25%

By Scott Nicholson

Amid a national housing slump, local home start-ups have slowed, though homeowners are taking advantage of low prices to remodel their existing homes.

New construction is down about 25 percent through the same period last year.

According to the Watauga County Department of Planning and Inspections, 211 permits for new single-family homes have been issued through October, with an estimated value of $61.1 million.

Through the same period last year, 266 single-family homes had been permitted, with an estimated value of $86.2 million.

Remodeling permits and values are down by similar amounts. Through October, 156 remodeling projects had an estimated value of $7.5 million, while through the same period last year, 169 projects had an estimated value of $9.3 million.

George Gilleland is president of the High Country Home Builders Association and owner of The Hardwood Company in Boone, selling wood products and other building materials. He said while the construction market has cooled a little, it’s still far from doom and gloom.

“I think we’re doing better than the national average,” Gilleland said. “People are still buying high-end second homes. Our average home prices are still up there.”

Renovations and remodeling have also tilted toward local, natural products, with more attention to energy efficiency. The mountain style or Adirondack style has been popular, with hardwood floors and energy-efficient windows popular replacement items, according to Gilleland.

“We’ve got a ‘green phase’ going on up here,” Gilleland said. “More of our builders are becoming ‘green’ certified. Before long that will be the code up here in Watauga County, but that’s still a ways off.”

Gilleland said some smaller construction companies might be struggling, but overall there were plenty of jobs even with mounting outside competition.

“There are quite a few renovations that are keeping a lot of builders afloat,” Gilleland said. “From what I’m seeing, there’s still enough work for everybody. We’re experiencing builders off the mountain coming up here. I still think, all in all, builders are still doing pretty well up here.”

The state of the housing and construction markets also affect county planning and budgeting, but sales tax revenues and permitting fees are the most closely watched factors in routine budget maintenance, according to county finance officer Doris Isaacs. Projected growth and property values loom larger in annual and long-term budget planning.

“We get a monthly building permit report and keep in contact with the Register of Deeds office not only for new building but sales of property,” Isaacs said. “There’s not a lot a lot of new construction going on, and sales in general have just slowed down.”

The county adopted what it characterized as a “conservative budget,” projecting growth of 3 percent in the current fiscal year.

“We were aware of some of the potential issues that would affect growth when we were preparing the budget,” Isaacs said, balancing projected growth, sales tax, and land-transfer taxes. “Historically our taxpayers have paid their taxes even when times might be difficult.”

Isaacs focuses primarily on this year’s budget but it’s important to keep up with monthly reports, particularly with sales tax, for planning ahead. Growth is also a moving target, since fewer home start-ups might mean some construction prices lower, which might stimulate business or commercial construction.

“When we look at the budget (for next year), we look at three-to-five year trends,” Isaacs said, with state changes such as Medicaid relief also factoring into local spending and burdens. Additionally, though numbers of new residential homes might drop this year, overall average value of those homes tends to skew to the higher-end, second-home market.