Homebuilding on bumpy road to bright future
When David Crowe took the stage at last weeks Home Builders Association of Metropolitan Portland annual housing forecast meeting, he brought news of a slowly building economy, a gradual pickup in consumer confidence and the bright building light that is multifamily housing.
But Crowe, chief economist for the National Association of Home Builders, also told an audience of builders, developers and others that tight restrictions on home mortgages, rising construction costs and a host of other headwinds arent exactly going to make it a walk in the park for builders in the coming years. Crowe then did his best to lighten the mood and leave the packed house at the Oregon Convention Center with something a little more optimistic.
I hope I convinced you that there is a promising future, he said.
Whether Crowe did that or not isnt quite clear. What he and the two other speakers on the lineup, state Treasurer Ted Wheeler and Todd Britsch, president of the Washington research company New Home Trends, did do is to paint a picture of an Oregon housing market that has gotten itself going again but that still has some rocky roads before it.
The homebuilding industry is essential to the economy of this state, Wheeler said. Until your industry is fully recovered, Oregons economy wont be fully recovered.
So far this year, builders have built about 2,000 homes in subdivisions in the four Portland-area counties, about half what they were building during the peak of the boom. That doesnt include infill building, which Britsch said makes up a big portion of all 3,700 single family permits in Multnomah, Clackamas, Washington and Clark County, Wash., in 2013 so far.
He noted that Clark County is the metro county that has showed the strongest numbers because its had the most job growth this year. Of the 6,000 jobs added in the region in 2013, Britsch said almost 4,000 of them have been in Clark County. Additionally, the county has seen 30 percent of the regions new home sales this year, up from 20 percent last year.
He also said the number of available building lots in the metro area is nowhere near where it needs to be to accommodate projected population growth in the next five years. The city of Hillsboro itself contains no five-acre or larger parcels for subdivisions, Britsch said.
His forecast bright spot was multifamily housing. According to Britsch, builders in the region have applied for 10,000 multifamily units in the past two years. At present they are all for apartments, but Britsch said by the time many of those units come on to the market in the next three to seven years, they could be converted to condominiums, especially if interest rates stay relatively low.
If (that happens), the condo market will recover, he said.
On a national level, Crowe noted that the economy has begun to chug forward again and should grow at a rate of nearly 3 percent next year and almost 4 percent in 2014. Housing has been growing and contributing to the economy as well, but because it took such a hit during the recession, its not carrying as much as weight it once did.
The important thing, Crowe said, is that its finally doing what its normally done again in terms of helping out.