Washington Co. homebuilders see subtle signs of consumer interest

May 22, 2010|By ARNOLD S. PLATOU

WASHINGTON COUNTY -- Ed and Donna Whitt took a step of economic faith last fall when they decided to spend $78,000 on a major renovation of their 150-year-old house.

"I think we were seeing a little more brightening in the economy at that point, so I think that's why we felt we could go ahead," Donna Whitt said last week from her rural Clear Spring home. "But the economy did make me very nervous. I thought about it a lot."

Like the Whitts, Scott and Kristin Bezanson still are uncertain about the economy.

The Bezansons decided this spring to hire a contractor to build a $70,000 addition onto their 1940s Cape Cod because their own financial planning feels solid -- not necessarily because they see better days ahead for the nation soon.

"You hear people talking about buying houses and, honestly, when I'm out, I see people in the stores. It seems people are moving about," Kristin Bezanson said from her Hagerstown home.


"There's still that question in your mind: Is the economy turning around or are we in the throes of it?" Bezanson said. "So it's hard to say we've definitely hit the bottom. And are we coming back or not? It's just hard to say."

An awakening of sorts

Across Washington County, figures show there is an awakening of sorts in the construction industry after more than two years of a recession so tight-fisted that stories are common about tradesmen out of work.

"Everything is slow," said Debi Harrington, executive director of the Home Builders Association of Washington County.

A year or so ago, "phones weren't even ringing" at construction businesses, Harrington said. Consumers "just weren't doing anything. They were just sitting."

The county's excise tax credit for homebuilders and the nation's tax credits for home buyers helped, but consumers still faced overriding worries, Harrington said.

"If you're concerned about your job when you wake up in the morning, it doesn't matter whether someone is going to take $50,000 off that house" that you might build, she said.

Purchases of existing houses have picked up since last October, however. Every month except March, sales here have grown over the same month in 2009 -- though sales still are far below their 2005 peak.

Realtors cite three key factors -- the relatively low loan interest rates, the abundance of lower-priced properties tied to foreclosures or loans owners are struggling to pay, and the home-buyer tax credit.

But for homebuilders, there's not a lot there yet to spur sales. The federal tax credit offer expired April 30. And the lower prices of distressed properties and thus, of other existing houses, attract many people who might otherwise want to buy a new house.

And while interest rates are attractive, lenders have increased standards that borrowers must meet.

Subtle change

Nonetheless, Harrington said, there does seem to have been a subtle change among consumers the past few months.

"What I'm hearing is, a lot of people are looking," she said. "There are a lot of people looking, getting estimates (for remodeling), but then, they're not following through."

In the 13 years she's worked for the homebuilders association, Harrington said, she's become accustomed to the general belief that the largely rural county lags other areas of Maryland in economic trends.

"I've always heard that here in Washington County, we're six months behind in hitting the (economy's) bottom and six months behind to feel the upswing," she said.

"What I find interesting this time with this downturn is that we've been pretty much level ... We're at the same level as everybody else (in homebuilding). Everybody else is at the same level of suffering as we are.

"We're seeing a little bit of light, a little bit of movement, from what I'm hearing. I am hearing business is just not here yet."

Membership in the homebuilders group itself seems to reflect this economic hesitation.

As recently as 2006, when the economy was nearing the end of its rapid expansion, the association had more than 170 dues-paying members, Harrington said. Now, she said, it has 100.

"Unfortunately, this economic downturn has hurt us. Trade associaton dues of all types -- they're the first to go in (members') budget and they're the last to come back," she said. "And we understand."

By the numbers

Numbers-wise, it is hard to quickly gauge the recession's impact on the local homebuilding and home improvement industry.

Hagerstown, like other local towns, issues its own building permits. The county government issues building permits for the suburban and rural areas.

And with the county, for instance, permits are issued -- and records kept -- on structures as diverse as garages, storage buildings, swimming pools and porches, decks and concrete slabs, in addition to all manner of houses and other buildings.

To try to measure this part of the economy thus far this spring, The Herald-Mail looked at figures issued by the county department of Permits and Inspections for each of these kinds of permits in March and April.

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