Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 9, 1994 TAG: 9401040334
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: Mag Poff Staff Writer
DATELINE: LENGTH: Medium
"1994 is going to be a tremendous year, as far as growth in our industry," said David Vaughn, head of Dominion Builders and immediate past president of the Roanoke Regional Home Builders Association.
"If interest rates stay low, it will be one of the strongest markets we've seen since the 1980s," said Bob Fetzer, who was installed Saturday as the association's new president. His company is Building Specialists.
Vaughn said a half-dozen new subdivisions are being developed in the region. Usually, he said, only one or two are under way at the same time.
Sales were up in the last quarter of 1993, according to Vaughn.
Builders in the region are all busy and short on inventory of completed houses, he said. "There are not many houses sitting out there."
His company alone has done $2.5 million worth of business in the last 75 days, he said. He is building at Autumn Park and Vista Forest.
Fetzer is happy about the strong business, but he worries about the possible impact of rising construction costs.
If activity remains high throughout the country, Fetzer said, there are predictions of lumber shortages as early as May or June.
New regulations place limits on timber harvesting, he said, and only half the number of sawmills are still operating as before the recession.
Rebuilding from Hurricane Andrew's devastation in Florida and the Mississippi River flooding in the Midwest is stressing supplies.
Quotations on lumber prices now are good for only a week at a time, compared to 30 days in the past, he said.
Because of the strong demand, prices also are rising for other construction materials, such as concrete and laminates, he said.
Fetzer also cited rules and regulations for construction as affecting housing affordability.
Still, Fetzer said, the signs point to growth in the immediate future.
Consumer confidence is high, and almost as much money is being spent on remodeling as on new construction.
Home improvements and construction are discretionary items, he pointed out, but right now people "feel good about their jobs and future." They are buying, expanding and upgrading homes.
That also promises prosperity for retailers who sell carpeting, furniture, fabrics and similar items, Fetzer said.
Bruce Cunningham of Christiansburg, president of the state home builders association, is optimistic about the strong demand, but he also expressed concern about costs.
The annual timber harvest, he said, has dropped from 1.2 billion board feet to 800 million board feet. That, he added, has caused a surge in lumber prices from $454 per 1,000 feet in November to $500 in December.
Although he called the lumber issue "a major concern," Cunningham is encouraged by the strong demand and a high number of building permits nationwide.
by CNB