Local construction
activity slows in fourth quarter; decline mirrors national trend
Ground is cleared for the West Volusia Retail Center, directly west
of the West Volusia Towne Centre
Residential and commercial construction
activity fell sharply in Volusia County in the fourth
quarter of 2007, mirroring national trends.
The winter holidays, growing concerns about the national economy and
uncertainty
regarding the outcome of the upcoming presidential election likely
contributed to the
decline in housing starts and new commercial construction projects
last quarter, area
observers say.
Residential permits
fall sharply
The county and
city building permit offices issued 253 single-family permits in the
final three months of 2007. That’s less than half the number issued
in each of the previous three quarters, and nearly half the number
issued in the fourth quarter of 2006 (456). These figures include
condominiums, but do not include permits issued for remodeling
additions.
Maybeth Irizarry-Binon, permit center manager for the county’s
Department of Growth and ResourceManagement, said the decline in
construction activity in the county last quarter “is the same trend
we’re seeing all over the country. I think people are waiting to see
how things shake out.”
Venetian Bay in New Smyrna, features 13 communities created by five
builders.
Shown above, Village Homes at Promenade Parke by Paytas Homes.
In addition to
concerns over the national economy, the glut of available new and
existing homes in the local market is influencing the hesitancy
among home builders to add new products to their inventory,
Irizarry-Binon said.
Mark
Dougherty, association executive for the Daytona Beach Area
Association of Realtors, said the decline in new homes and condos
being built in Volusia County is a necessary first step in the
recovery of the local housing market, which has been in a slump
since the beginning of 2006.
“We need to
see a decline in inventory combined with a corresponding increase in
demand,” said Dougherty, who added that home construction activity
likely will remain slow until current inventory is whittled down and
overall home prices – which have been in decline – start to rise
again.
New homes are filling up empty lots
at Bayberry Lakes, a KB Home development
in Daytona Beach west of LPGA at International Golf Drive.
“I’d be
hesitant to believe builders are going to ramp up efforts
significantly to put new homes on the market until then,” Dougherty
said.
On the plus
side, Dougherty said: “We’re already seeing a small uptick in
activity by people shopping around to buy homes.”
The increase
in house hunting activity locally likely is being fueled by a
combination of newcomers, recent passage of the state property tax
reform amendment (which allows Florida homeowners to transfer their
Save Our Homes tax exemption to a newly purchased home within the
state), and foreign investors who are taking advantage of the lower
home prices and favorable currency exchange rates, said Dougherty.
Home builder
Bob Fitzsimmons, CEO of Gallery Homes of DeLand, said his company
began construction of six single-family homes in the Highlands area,
just west of DeLand, in the fourth quarter.
“I don’t think
there’s a glut of affordable homes on market,” said Fitzsimmons, who
said the three-bedroom/two-bath homes his company is building range
in price from $142,000 to $180,000 – all below the median price for
homes on the market in Volusia County.
The majority
of affordable available homes in Volusia County tend to be older
homes that need repair and/or a lot of maintenance, said Fitzsimmons
in explaining his company’s decision to proceed with the
construction of new homes despite the housing slump.
Where
Fitzsimmons believes the glut of homes primarily exists locally is
for properties
priced $240,000 and up. Some home builders also have said there
still appears to be reasonable demand in the area for luxury homes,
particularly along the ocean.
Of the
building permits issued for new homes last quarter, 90 were in
unincorporated
Volusia County, most west of Interstate 95. Among the cities, DeLand
issued the most permits for new homes (46), followed by New Smyrna
Beach (37), Daytona Beach (28) Port Orange (17), Deltona (16) and
DeBary (10).
The average
value of the new homes permitted countywide last quarter was
$236,063, up slightly from $234,711 in the fourth quarter of 2006.
Integra Landings, a new townhome community, is being constructed in
Orange City just east of Veterans'Memorial Parkway at East Rhode Island
Avenue.
Same story for commercial
In the
fourth quarter of 2007, 25 building permits were issued for new
commercial projects in Volusia County – less than half the number of
permits issued in the third quarter (62), and down significantly
from the 36 issued in the October-November-December period in 2006.
The commercial projects permitted in the county last quarter had a
combined value of $24.8 million, which also was down sharply from
nearly $98 million in combined value for the commercial projects
that got the green light in the fourth quarter of 2006. The combined
value of the commercial projects permitted in the third quarter of
2007 was $95.7 million.
“It’s too early to say whether the fourth-quarter slowdown in local
commercial construction activity – which had been going strong – is
the beginning of a trend or a
momentary break in the action by local developers,” said Rick
Michael, director of the county Department of Economic Development.
“I’m not overly concerned about commercial construction, which has a
tendency to be up and down.”
Michael added he expects 2008 to be a busy year for commercial
construction in the county. “I’m aware of well over $100 million in
new commercial projects that will be permitted in ’08 – and that’s
just the projects we’re engaged in.”
Those projects include the first phase of the massive Daytona Live!
mixed-use complex that International Speedway Corp. and its
Baltimore-based development partner, The Cordish Company, are
planning to build along International Speedway Boulevard, across the
street from ISC’s Daytona International Speedway.
“We’re going to see new retail projects in Orange City and there’s a
good chance we’ll see a sizable amount of retail permitted in
Deltona,” saidMichael.
Of the commercial building permits issued locally last quarter, the
largest was a project in unincorporated Volusia County—the
$4.7-million, 62,872-square-foot production plant for NSI Intellitec
Products at the county’s DeLand Crossings Industrial Park, which
broke ground in December. The plant, set to be completed by June, is
nearly double the size of the
manufacturer’s current plant at DeLand Airport Industrial Park. NSI
Intellitec makes electrical parts for heavy-duty trucks, marine
equipment and recreational vehicles.
DeLand Crossings, a 25-acre business park that is being developed by
the county near Interstate 4 and State Road 44, also is the site of
a future manufacturing plant that will be operated by BBK
Performance Inc., a California company that makes after-market auto
parts. A groundbreaking is set forMarch 10.
Within the cities, New Smyrna Beach issued five commercial building
permits last quarter. Daytona Beach, Ormond Beach and Orange City
each approved four commercial projects. DeLand issued two commercial
permits while DeBary and South Daytona issued one permit apiece last
quarter.
Commercial construction held steady in ’07, despite continued
decline of housing market
Kohl's Department store in Orange City is getting a new neighbor. The
West Volusia Retail Center,
is being built directly west of the newWest Volusia Towne Center in
Orange City at the intersection of
Harley Strickland Boulevard and Veterans' Memorial Parkway.
Commercial
construction activity remained robust in Volusia County last year,
with the combined value of new projects permitted nearly matching
the combined value of the projects permitted in 2006.
New home construction activity declined significantly in 2007 for
the second year in a row.
For the year, 184 commercial construction permits were issued
countywide in 2007, down from 248 permits issued in 2006.
The projects permitted last year had a combined value of $334.5
million, down slightly from the $341.5 million combined value of the
commercial projects permitted in Volusia County in 2006, but up
significantly from the $231 million combined value for new
commercial projects in 2005, when 246 building permits were issued.
The average value of the commercial projects permitted in the county
last year was $1.82 million, up from the $1.37 million average value
for commercial projects permitted in 2006.
Some of the
notable commercial projects that got under way last year were the
10-story north tower building at Halifax Medical Center in Daytona
Beach, which broke ground in April, the Parker Boats dealership on
Tomoka Farms Road, just south of the Daytona Auto Mall, which opened
in September, and Orange City Village Center, which broke ground in
October.
On the residential construction side, 1,938 building permits were
issued for single family homes and condominiums in Volusia County
last year, down from 3,463 in 2006, and 6,856 in 2005, when the
region’s housing boom peaked.
The combined value of the new homes permitted in the county last
year was $495.8 million, down from $774.7 million in 2006 and $1.29
billion in 2005.
While overall prices for existing homes fell last year, the average
value for new homes permitted in Volusia County rose to $255,834 in
2007, up from $223,720 in 2006 and $188,619 in 2005.
Volusia County issued 452 singlefamily home permits for
unincorporated Volusia in 2007. Among cities, New Smyrna Beach
issued the most residential permits – 320. Daytona Beach issued 304;
DeLand issued 289; Port Orange 206; and Deltona 157.
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