Home building falls in Indian River County

By Robert Barba (Contact)
Friday, October 5, 2007

Builders say they expect a better 2008 after watching new-home construction in Indian River County drop by half this year.
The number of planned new single-family homes in Indian River County decreased 53 percent between January and August compared with the same months of last year.


There were 838 permits for new homes issued this year versus 1,802 last year, according to the building departments of Indian River County and Sebastian. The county handles permits for Vero Beach.
"These numbers are indicative of what needed to happen," said William Pittenger, chief real estate economist for Seacoast National Bank. "It's an ongoing correction, and I think we will begin leveling out as we approach 2008."
Pittenger expects the market to begin a rebound in 2009, when prices and sales will return to levels last seen in 2003.
During the boom that started 2004 and lasted into 2006, Pittenger said builders of new homes outpaced demand by 25 percent to 40 percent.
"They forgot a fundamental economic principal that for every home built there needs to be an owner or a tenant," Pittenger said. "This really had to come. And it's only bad news if you are a builder or in an allied industry."
With demand for new homes still weak, builders are hurting, said Don Santos, president of Santos Construction and former president of the Treasure Coast Builders Association.

"It is not overly surprising, but it's still bad," Santos said. "It is affecting our industry pretty drastically."
To survive, some companies are taking lower-revenue jobs, such as home remodeling, or finding work in the still-busy commercial market.

"Companies have to be a lot more nimble and innovative," Santos said. "I am doing a church addition right now."
The number of jobs in construction has declined at a similar pace to building permits, Santos said. Yet those numbers are not reflected in the unemployment figures because the brunt of those laid off were undocumented workers.
"They don't claim unemployment," Santos said. "They just left for places like the Gulf Coast. They want to work."
The slowdown is now spilling over to technicians and skilled laborers, he said, as the industry waits for a rebound.
"Right now we are bumping along the bottom," Santos said. "I think 2008 will start to bring us out of the doldrums."
For long-time builders, the current slowdown is nothing new, said Ken Ringe, president of Bayview Construction Corp. in Stuart
Today, Bayview is one of the busiest commercial builders on the Treasure Coast, but started in residential. It expanded during a housing slowdown in the 1980s, Ringe said.

"The key is to remain flexible," Ringe said. "Builders think when it's good, it's always going to be good. And when it's bad, it's never going to get good."
January to August 2006: 1,527 permits for single-family homes
January to August 2007: 779 permits for single-family homes
49 percent decrease
SEBASTIAN
January to August 2006: 275 permits for single-family homes
January to August 2007: 59 permits for single-family homes
79 percent decrease