BY BILL FREEHLING
Area home builders say they're starting to see demand pick up a bit for new homes, mirroring a national report Tuesday.
The U.S. Commerce Department reported that construction of new homes and apartments jumped 22 percent from January. Applications for building permits rose 3 percent from January.
Dan Spear, owner of Spear Builders in Spotsylvania County, said his company has been receiving more traffic and phone calls of late. His prices have dropped, and there's less competition from other builders, some of which have closed.
Though acknowledging that foreclosures are "the bargains out there right now," Spear said some people prefer buying new rather than making costly repairs to damaged used homes.
"You know what you're getting when you buy a new home," he said.
Still, he said, foreclosures need to be cleared from the market before there's a true recovery. He noted that his company is down to seven full-time employees from a peak of 38--a trend reported by most area home builders.
Housing construction in the U.S. is down 47.3 percent from a year ago, and not all economists are ready to call a bottom.
"This is a temporary rebound, not a recovery," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
There were 56 building permits filed in February for single-family detached houses in the area, according to the Fredericksburg Area Builders Association. By contrast, there were 251 filed in February 2006 and 95 in February 2008.
Adam Fried, CEO of Atlantic Builders, said conditions remain very difficult for local builders, and he doesn't see a quick turnaround. He thinks a further decrease in mortgage rates would improve sales.
But Fried said February was a fairly good sales month, particularly at Master's Mill in Stafford County. He said spring sales typically pick up, and the Fredericksburg area remains somewhat sheltered by federal government jobs.
There were 23 residential building permits filed in Stafford in February, one more than February 2008.
Justin Sullivan, sales and marketing manager for Hour Homes Inc., has also seen an uptick in Stafford. His company sells new homes in Seasons Landing and Augustine. Sullivan notes that building permits aren't filed until after a sale, so permit data trail sales activity.
He said very few of the highest-end homes are selling, but he's seeing a good deal of interest in homes selling in the $300,000s and low $400,000s. Much of the demand is coming from people with government jobs moving to the Quantico Marine Corps Base.
Sullivan said building a house is about a six-month process, so some people are buying now so they can move in before the school year starts in the fall.
"My general perception is that things are turning around," Sullivan said.
That's also been the impression of Doug Jones and Jim Curtis, executives at the Tricord Cos. The company sold five homes last month and has seven closings scheduled for this month, whereas previous months brought just a sale or two.
Curtis said townhouses are selling best, as first-time buyers take advantage of lower housing prices, low interest rates, the $8,000 tax credit and mortgage payments that are comparable to rents. Sales have been particularly brisk at Caroline County's Pendleton.
--The Associated Press contributed to this report.
Bill Freehling: 540/374-5405
Email: bfreehling@freelancestar.com