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The trend in home building for 2014 in Shelby County is expected to be up just slightly from last year, experts say.
Dale Akins, founder and president of The Market Edge, a service that provides building permit leads to material suppliers, subcontractors, financial institutions and other companies that support the construction industry, made that prediction when he spoke Wednesday to the Shelby County Council and Building Industry Association at their annual luncheon.
“I think it [building trend] will be up a little; I don’t think it’s going to down, or go crazy, but my guess it will be up a little,” he said.
Akins said he bases that prediction on three factors: building permits, employment trends and population figures.
“The building permit trajectory indicates 2014 will be up, the slowing employment trends indicate 2014 will be down and population estimates indicate demand will be up – two out of three indicators are positive, so my guess is we’ll be up slightly,” he said.
The Market Edge, which collects data on building trends, shows that building permits in Shelby County began dropping in 2005, from 525 that year, down more than 100 each year, before starting to climb again in 2012, a trend that has continued, with 141 building permits in 2012, 154 in 2013 and 160 expected this year.
The Triple S Planning and Zoning Commission reported that of those 154 building permits issued last year, most of them – 134 – were for single-family homes. Of the rest three were for manufactured or modular homes, 15 were for patio homes, condos or townhouses and two were for trailers. Of the 134, 56 were in the City of Shelbyville, 86 were in the county, and 12 were in Simpsonville.
Housing market stable
Shelbyville realtor Larry Roger said that trends in the housing market are holding steady.
“We’re running about the same as we were last year,” he said. “Things are going under contract quicker, but we’re getting less listings. It’s becoming more of a seller’s market than it’s been in the last few years, when it’s been a buyer’s market, but the trend is changing. It looks great for a spell. For about three weeks to a month, we’re rolling, then the market will turn, and there’s no rhythm or reason for it. But we’re getting good listings at good prices. They’re going under contract quicker than they did in previous years.”
Rogers said the most popular price range that homes are selling for in Shelby County is from $175,000 to $225,000, which is in line with the national average. The National Association of Realtors reported that nationwide, the median price for existing homes last year was $198,200.
He echoed Akins’ opinion that the market is slightly on the rise in 2014.
“I think it’s good, it was much better in 2013 and 2014’s following suit,” he said. “Existing homes are selling well, and also patio home sales are very strong.”
Akins said the correlation between the employment and the home building industry in this area can be seen by comparing employed labor force numbers in Shelby, Franklin, Spencer, Jefferson and Oldham counties.
“There were sixteen thousand, eight hundred and fifty-seven jobs created in the last ten years in these five counties, with sixty-six percent of that job growth in Jefferson County,” he said.
Realtors had pointed out that in looking at trends in the housing markets, exiting home sales also include homes that have been foreclosed on, something that bodes well for Shelby’s housing market when you consider that the median home price is $175,000, up $6,000 from 2012.
Last year, Shelby County Master Commission Todd Davis had noted that most of the previous year’s foreclosures – 178 – were actually homes that had gone in foreclosure in 2011, but lenders did not release them immediately because they did not want to flood the market.
He said Thursday that is what he has seen happening, both in 2013 – with 120 foreclosures – and this year.
“They’re going to be down somewhat, I think [this year],” he said. “It appears that we’re not selling at the same pace as we were last year. If what we have sold so far in the first four months of 2014 is any indication, we’ll be down a pretty significant percentage [of foreclosures] this year.”
Do less foreclosures indicate a recovering economy?
“That’s the way I would interpret it,” he said.