4th quarter 2009           

Residential construction picks up in third quarter; commercial building falls

A newly built home at the Victoria Park community in DeLand.

Volusia’s homebuilding industry appears to be on the rebound.

According to statistics compiled by the Volusia County Department of Economic Development from the county and city building permit offices, the July-August-September period marks the second quarter in a row that the number of residential construction permits exceeded the number issued in the previous quarter.

Conversely, the number of commercial permits issued fell in the third quarter, compared with the previous quarter.

Residential construction overview
Economic Growth charts

“All of a sudden, we’re getting enough people,
who despite all the inventory of existing homes out there, are saying ‘I want new – not a foreclosure,’” said Phil Ehlinger, Director of Volusia County’s Department of Economic Development.

The increase in new home construction also may be a result of area builders lowering prices and adding more green - e.g., energy efficient/environmentally-friendly features.

Beazer Homes, which is offering new homes in the Victoria Park Trails subdivision in DeLand, recently announced it is offering up to $8,000 in closing costs on select move-in-ready homes that close by Nov. 30.

David Byrnes, president of Beazer's Florida division in Orlando, said his company has seen an increase in sales of new homes at Victoria Park Trails thanks to the $8,000 tax credit being offered by the federal government to first-time homebuyers. That tax credit offer, which was set to expire at the end of November, was recently extended through the end of April. Byrnes said his company has decided to sweeten the pot to entice potential buyers by offering an additional incentive of up to $8,000 to offset closing costs.

Byrnes said about half of the new home buyers recently at Victoria Park Trails are first-time buyers, who want to take advantage of the lower prices. Most of the other buyers are empty nesters, who are downsizing. Byrnes said his company offers new homes in DeLand starting as low as $169,990—down from starting prices of $199,990 a
year ago.

Beazer is also one of several area builders offering new homes with more energy efficient/environmentally friendly-features.

“It’s the way of the future for Beazer,” said Theresa Tilton, a company vice president in reference to the builder’s new “eSMART” homes.

Higher energy efficiency translates into lower utility bills for home owners, according to builders.

Rosie Messina, vice president of sales and marketing for ICI Homes in Daytona Beach, agreed. Her company began offering new “eFactor” homes with energy-efficient features a few years ago. Those “green” features are “something buyers are coming to expect,” she said.

Messina said ICI, which primarily has focused on luxury home buyers, is planning to offer new home plans with smaller footprints, energy-efficient features, and lower asking prices, starting around $150,000 in an effort to appeal to first-time buyers.

“There’s certainly a lot more activity in that end of the market in recent months,” said Messina.

Ehlinger, said the volume of residential permits issued in the third quarter exceeded his expectations. One factor that may be contributing to the upswing is that banks are starting to lend again for new home purchases.

“I doubt if all those new homes are being bought for cash,” said Ehlinger.

There were 220 residential permits issued countywide in the third quarter, up from the 178 residential permits issued in the second quarter, and the 124 permits issued in the first quarter.

DeLand issued 36 residential permits in the third quarter, the most among Volusia’s cities. Port Orange issued 35 residential permits; Daytona Beach and New Smyrna each issued 30; Ormond Beach 27, and Deltona 20. The 37 residential permits issued by the county topped all jurisdictions in the county. Most of the new homes being built in unincorporated Volusia are in areas that are mostly west of Interstate 95.

Commercial construction overview
Economic Growth charts

Construction is proceeding at The Pavilion open-air shopping center in Port Orange.

On the commercial side, 13 permits were issued countywide during the third quarter, down from 20 permits issued in the second quarter, and 19 permits issued in the first quarter. Daytona Beach issued four commercial permits during the quarter, the most among all jurisdictions. Port Orange and DeLand each issued three commercial permits.

Ehlinger said the decline in commercial permits doesn’t tell the whole story.

“There are a lot of commercial projects out there that already have been permitted; some are under construction, while others have been put on hold,” said Ehlinger. “I think what is being built right now are user and site-specific projects.”

An example is the 139,471-square-foot headquarters in Port Orange for Raydon Corp.,
which broke ground in September.

Raydon, a maker of virtual reality training simulators used by the military, is based in Daytona Beach, but needs larger facilities to consolidate operations under a single roof. The company, which employs 300, has been adding workers steadily in recent months because of an uptick in its business.

The Pavilion open-air shopping center in Port Orange is the single largest commercial
project under construction in the county.

Anchored by a Belk department store, The Pavilion will offer more than 550,000 square feet of retail, dining and entertainment space upon its completion. Other tenants will include a 14-screen Hollywood Theaters movie complex, a Marshalls/Home Goods Megastore, and a Michael’s Arts &Crafts Store.

The developer of The Pavilion is CBL & Associates, which also owns the Volusia Mall. The Pavilion is along Williamson Boulevard, just north of Taylor Road, west of I-95.