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Bump in home construction requests spurs cautious optimism

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Photo by Bill Olmsted

Jon Steurer, left, and Aaron Duoss of Preferred Homes work to get a roof on a home under construction on Parkwood Drive on Janesville’s north side. The number of building permits requested in the city rose in 2012, but they remain well below levels prior to 2008.

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JANESVILLE — Permits to build single-family homes in Janesville more than doubled in 2012, and local officials hope that means the worst is behind the local home construction industry.

A total of 62 permits have been issued so far in 2012. That compares to 29 in 2011, two of which were for duplexes.

Although both years pale in comparison to the 241 issued in 2006, Vicky Miller, development specialist for the city, hopes this year's numbers are an indication 2011 was the home construction cellar.

"I think last year was the bottom, but time will tell," Miller said.

"It's going to take a long time to get back to where we were, if we ever do actually get back," she said.

"We're encouraged by the fact there's so much going on with the commercial stuff, bringing more jobs and more people into town," she said.

"We just hope that continues."

The city issued 2,116 commercial and residential building permits in 2012, up 5.6 percent from the 2,004 issued in 2011.

Despite the increase in permit numbers, the value through Sept. 24 was less than the value through Sept. 24 in 2011: $23.58 million compared to $34.93 million.

That's a decrease in property value of 32.5 percent, mostly because one project—St. Mary's Janesville Hospital—added so much value in 2011.

Carol Engebretson, executive officer of the South Central Wisconsin Builder's Association, said she is tempted to say area building activity has hit bottom and that things are slowly improving.

"But from what I've heard from some contractors, by no means is it what I would call good," she said.

The group's membership has declined, Engebretson said.

"That tells me a lot of builder members are no longer building or have switched to a new profession," she said.

The remaining builders are scrambling for the same home-building jobs, she said.

"Everybody's trying harder for a much smaller piece of the pie," she said.

Eight of the permits issued this year for single-family homes were to Beringer Homes.

Co-owner Jacque Wegner said this year's activity is "a little bit" better than last year, but the overall picture is still questionable.

"I think we're seeing some stability in the prices and the product," Wegner said.

People can afford less, so the company is offering smaller homes with fewer frills. The basic features are still there, she said.

The company continued to build homes on speculation.

Five years ago, the company might have built a two-story, $200,000 home on speculation, Wegner said. Now, the spec homes are in the $120,000-to-$160,000 range.

The company recently sold a 1,500-square-foot spec house at 4224 Braxton Drive.

The new owners, Trisch and Jim Bass, are from Madison and are nearing retirement.

Trisch Bass said the couple were looking for a one-story home and discovered their money could go further in Janesville.

Real estate prices in Madison were a shock, she said. Prices had dropped but still were high.

They looked at every community within 45 minutes of Madison.

"When we got to Janesville, we went, 'Huh,'" she recalled. "'Look at what you can buy in Janesville.' We got serious about looking at Janesville."

The couple will be moving from a 1,000-square-foot home. They are upsizing to 1,500 square feet and a 3½-car garage.

"The real estate prices could not be beat for what we could get for our dollar," she said.

She found the shopping opportunities good in Janesville, and their new home is close to Interstate 90/39, making Jim's drive to work in Stoughton easier.

They decided now is the time to sell and buy as the economy begins to turn around. They have reclaimed much of the value of their current home but can take advantage of the lower construction prices here.

The couple have never had a new home, and they were able to get "pretty much everything the way we wanted it," Bass said.