Wednesday, April 24, 2002
Steamboat Springs Cheap money and materials along with increased confidence in the market should fuel an increase in construction in the coming months, those in the industry said Tuesday.
"I hope that and I feel that the business is going to come back in the second half of the year," said Doug Whiting of BMC West, a building materials supplier.
Whiting and Bud Rogers of Bud Rogers Construction were the featured speakers at a Business-to-Business luncheon hosted by the Steamboat Springs Chamber Resort Association.
Rogers and Whiting noted that low interest rates of about 4.5 percent on construction loans should prompt an uptick in residential construction, which has fallen off considerably in the past six months.
Whiting also noted construction materials are down substantially.
For example, plywood that sold for $28 a sheet two years ago is going for $19 a sheet now.
Both men said remodeling and repair jobs are the busiest segment of the industry right now. Whiting said remodeling and repair business is up about 25 percent over last year, helping to offset the 30 percent decline he has seen in residential construction business.
Whiting estimated residential construction makes up 55 percent of his company's business; remodeling and repair makes up 25 percent; and commercial and industrial construction makes up 15 percent.
Rogers expects smaller, single-family homes to make the strongest comeback in the coming months.
But the higher end of the residential construction market likely will remain stagnant, he said.
"I do see large spec homes staying way down," Rogers said.
"Quite frankly, I'd be really nervous right now if I had a $3 million spec home on the market.
"What I would like to see happen is West End Village and projects with smaller homes like that. I think there is a real need for it and a real demand for it right now."
Whiting noted that building permits for residential units, which he uses to forecast demand for his business, were down through February compared to the previous two years, but the average value of the permits had gone up. And he believes the number of permits will rise in the coming months.
"After the first of April, things started to pick up and indications are we're going to have a good finish to the year," he said.
"Material costs are down, money is cheap. It's a good time to build."