New home construction back on track
The number of new single-family home permits being issued shows the building industry in Cape Coral is healthy – and sustainable.
Paul Dickson, chief building official with the city of Cape Coral, said 451 single-family home permits have been pulled so far this year. In 2014, 591 permits were pulled for the entire year.
“It has been steady growth for the past two or three years,” he said. “I think it is very positive.”
Although the city is seeing an increase in new growth, it has a long way to go before reaching the construction boom of the early 2000s.
“In 2003, I issued 3,818,” he said of single-family home permits. “We have a long way to go to get back to 2003 levels.”
A fair number of permits are being pulled for smaller homes, Dickson said, adding that he is also seeing an increase in custom and larger homes as well.
Dickson said with the size of Cape Coral, the city could be doing more than it currently is, but the numbers are still showing a steady increase – and they do not want to go too fast or too quickly in terms of building new homes.
Although the growth of new single-family homes is spread out across Cape Coral, Dickson said the gated community Sandoval, as well as Bella Vida are experiencing new homes growth.
The increase in new single-family homes is a wonderful thing to see after the recession, said Gary Aubuchon of Aubuchon Homes.
“For us we saw it begin to take place over the last two to three years, but in the past year in particular we have seen a very strong resurgence,” he said of single-family homes. “Our sales have more than doubled year over year.”
Cape Coral Construction Industry Association Executive Director Bill Johnson agrees that over the past year to year and a half, there has been an increase in new home construction for the single family home market throughout the entire city of Cape Coral. He believes the increase is due to a better time in the economy, allowing people to start building home again.
The market, which was once saturated with homes that were already built and foreclosures, has now decreased, he said.
“People are looking to go back out and build a home of their dreams,” Johnson said, adding that individuals can go to one of the city’s fine local builders to create their dream home.
Aubuchon attributed the growth to a combination of several things:
There is a shrinking inventory of existing homes available for sale; prices of existing homes have gone up significantly; the market has rebounded and buyers are finding that it makes more sense to build a new home because of the rising cost of existing homes.
In addition, Aubuchon said their clients are finding very low interest rates, resulting in more affordable homeownership.
“Our clients are typically finding interest rates in the 3 to 4 percent range,” he said.
An important aspect of this particular construction boom is it is not like the boom of the early 2000s, but rather a healthy, sustainable market, Aubuchon said. Unlike the “boom” market that led to the housing bust, people are purchasing and building for their own use, rather than doing it from an investment standpoint.
“Half of our buyers are paying with cash. People are contributing to this building boom with their own dollars, or with serious equity when they are financing,” Aubuchon said. “We don’t see this as a bubble market. We see this as a true and sustainable market.”
The homes that the Aubuchon Group is building vary in size from 2,000 square feet to more than 6,000 square feet.
“We are seeing buyers across the price spectrum for our company, which is in the range of $300,000 to over $2 million,” Aubuchon said.
Entry level construction is also seeing growth.
Now with a better economy, people are able to go out and get that first home, Johnson said, making a jump that they could not do two or three years ago.
According to Johnson, new home construction is ranging anywhere from $175,000 to $350,000, with an average of 1,600 square feet to 2,500 square feet. Although there are some European buyers, as well as out-of-state buyers, Johnson said there are still a lot of local people making the jump from renting to owning.
In terms of buyers, Aubuchon said they are experiencing three different kinds. The first is the local buyer moving up from an older or smaller home into a newer or larger home. The other buyers include individuals traveling to Cape Coral from the Midwest and Northeast, as well as from Europe, Germany in particular.
Aubuchon said they are building a significant number of homes in the older section of southeast Cape Coral.
“The southwest Cape has always been a strong market for us,” he said. “The new emerging market is the southeast Cape.”
The emerging market is tearing down existing homes and rebuilding a newer home on the same property.
“It represents about 25 percent of all the construction we do,” Aubuchon said.
The rebuilding is usually a new buyer that bought an older existing home for the land and beautiful lot.
“They weren’t interested in the house, but the location,” Aubuchon said. “We knock down and build exactly what they want in that spot.”
Johnson said it is good to see that the market is coming back.
“Cape Coral has always been a resilient city. To see growth come back the way it has, it is a refreshing sight,” he said. “We have a very good city government, council and mayor, which has made our city noticeable on a regional and state level. Cape Coral is an excellent place to live, so why not build a home here?”
The CCCIA and the Lee Building Industry Association are hosting a trade show event from 5:30 p.m. to 7:30 p.m. Tuesday, June 2, at The Ranch Concert Hall, 2158 Colonial Blvd.
The expanded Contractors Showcase will offer networking opportunities with available subcontractors.