Local builders and Realtors report residential sales in new construction are on the upswing.
With record low interest rates and good deals on new construction, they say it is the perfect time to build.
Todd Olthof, of Olthof Homes in St. John, said there has been a nice steady rise in the new construction market.
“It has been refreshing and we are all grateful that the famine is over and that we can start to get back to business,” Olthof said.
Olthof Homes is currently building in 12 subdivisions in Lake and Porter counties.
Realtor Carol Biel, of Century 21 Executive Realty, markets Crown Point’s Regency Subdivision for Providence Builders.
The good news, Biel said, is the new construction market is on the rebound with strong sales starting in the fall and accelerating this year.
“Typically the holiday season is slow,” Biel said. “We did not experience that.”
There are 11 single family homes under construction in Regency, Biel said. Seven of those are sold, four are for sale and there are seven additional homes under contract, which haven’t been started. Biel said in 2011 Providence had 25 contracts across the board including neighborhoods in Winfield and Lowell. There were 80 contracts in 2012 and 25 to date this year.
Realtor/builder Frank Morin, of Century 21 Heritage and Accent Homes, agrees with Biel that new construction sales are greatly increasing. Accent Homes is building in nine subdivisions in Lake and Porter counties.
“Business started to pick up in the spring and summer of last year,” Morin said. “It has been accelerating more, getting busier as we get further in the year. It is very significant. Traffic is heavier and the number of sales is increasing.”
Olthof said 28 housing permits were issued in Lake County this January compared to 25 in January 2012. There were 616 permits issued in 2011 and 799 issued in 2012 in Lake County showing the new construction market is heading in a positive direction, Olthof said. However, he noted in 2005 Lake County issued 2,854 permits for all types of housing including apartment buildings.
“All builders in the Home Builders Association are relieved to see the number moving in a positive direction,” Olthof said. “That is certainly encouraging. However it is also important to realize that there is still a long road ahead of us.”
Tom Fleming, president of Ellendale Farm Ltd in Crown Point, has brought two new phases of the Ellendale Farms before the city planners for approval.
One is a 15-lot phase. Nine of the lots are presold, Fleming said. He said 13 out of 41 lots are presold in the Highlands of Ellendale Farms. “We are starting to see a major turn-around in Crown Point and I think that is good for everybody,” Fleming said.
Morin attributes the increased sales to the psychology of the market and low interest rates.
“I think there is a great deal of pent up demand that just can’t wait any longer,” Morin said. “People are beginning to feel more confident about the economy and about jobs.”
“We have first-time buyers coming in with 3.5 percent down, FHA financing, getting an interest rate from 3.25 percent to 3.625 percent, which allows them to afford a lot more house.”
“Another factor is the pricing,” Biel said. “Real estate is supply and demand. What is going to happen is once things get really busy and everything picks up again? You are going to see prices go up.”