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New Home Construction Shows Steady Improvement

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It's been seven years since the housing bubble burst but you may have noticed an increase in construction projects lately.

As that industry improves, more jobs are becoming available.

New planned communities are popping up all over northern Nevada, with more and more people buying new homes. "The resale market has shrunk, we're seeing people coming from California, we're seeing people wanting new houses," Kenneth Hendrix, Managing Member of Jenuane Communities and KDH Builders said. "I think that after seven or eight years of a downturn, people want something new."

"It's the American Dream," Mike Dillon, Builders Association of Northern Nevada Executive Director said. "Everybody eventually is going to want to get back in a house again."

The number of building permits, in Washoe County, has tripled in recent years. "Five years ago, we were doing 400 permits, which was nothing," Dillon said. "Then that doubled to 800. Then we were at 1,200."

As many as 1,400 building permits are expected this year. Still a far cry from the 6,000 during the peak of the housing boom. "I think if we can get into that one or two percent growth rate where you have about 3,000 homes, 2,500 homes being built a year, that's ideal," Dillon said.

With more new homes being built, more people are going back to work in the construction industry. "Between our companies and our concrete companies, we have about 50 people working and that's probably gone up 15% to 20% in the last two years," Hendrix said.

Despite Nevada's 8.8% unemployment rate, contractors are having a hard time finding skilled workers to fill open positions. "We have lost a lot of people that were in that when we were in the big boom and a lot of those people have left or are doing other things now," Dillon said.

New home prices in The Overlook at the Pinnacles, in Sparks, are between $270-330,000, and interest rates are still in the low fours. But with demand and prices both rising, Dillon says he doesn't expect another bubble.

"Homes should still be able to hold their value and it's still an affordable price," Dillon said.

New communities mean jobs are needed to create the infrastructure, including things like roads, sewers, and electricity. Dillon says the increase in new home construction means more work in those areas. It means those workers will be making and spending money again.

Written by Paul Nelson
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