Oregon Housing Market Cools; Builders Uncertain as to Future
Permits for single-family homes dipped 15 percent in Lane County, Oregon, last year, compared with 2005, U.S. Census figures reported by yesterday’s edition of the Register-Guard indicate.
In spite of that, most local home builders still had a good year, according to Ed McMahon, executive vice president of the Home Builders Association of Lane County.
Coming off two red-hot years in the Oregon housing market may make last year’s statistics look artificially gloomy, when in fact they indicate a return to a more stable level of development.
Even so, other ingredients in the construction mix - high Oregon mortgage costs, land scarcity and rising development costs - mean the future for local home builders may not be as rosy as the recent past.
Home builders took out 864 permits for new homes in 2006, the value of which exceeded $179 million. In addition, local officials signed off on more than 80 mobile or manufactured homes, for a total of $11 million.
Last year was good for local builders partly because the Mountaingate subdivision in east Springfield opened up a lot of ready-to-build land.
But McMahon worries that the future may not look as promising.
“We’re seeing more and more of a trend where land that opens up is being built on by a real estate developer. Instead of developing the lots and selling them off to other home builders, they’re keeping it for themselves,” he said.
Available land for housing in the Eugene-Springfield metropolitan area has been shrinking rapidly, McMahon said, driving up mortgage prices and forcing area builders to look to outlying communities for buildable land.
The Home Builders Association has urged Eugene and Springfield to expand their urban growth boundaries, contending that making more land available for residential and other development would lower costs for prospective home mortgage seekers and strengthen the housing industry.
Recent escalation of land costs has led to more development being done by big, out-of-town builders with deeper pockets than most local home builders.
In fact, almost 25 percent of the permits for single-family homes issued last year went to non-Lane County builders.
Housing giant D.R. Horton Inc., founded in Fort Worth, Texas, in 1978 and now operating in 84 markets in 27 states, led the pack with 97 building permits, mostly in Eugene’s far-west Bethel area.
D.R. Horton’s promotional materials tout the company, which completed more than 53,000 units in its last fiscal year that ended in September, as “the largest home builder in the United States.”
Other major out-of-town home builders in 2006 included Hayden Enterprises of Redmond, with 45 permits with a median value of $151,000; JLS Custom Homes of Beaverton, which took out 28 building permits with a median of $166,000; and Adair Homes of Beaverton, with 23 permits and a $143,000 home price.
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