Although the homebuilding industry in Rhode Island has not been quite as busy this year as in the past few years, many experts say the market is still healthy.
According to the Rhode Island Builders Association 1,606 building permits have been issued in the state from January to the end of September. This figure represents only 76 fewer homes than in the same amount of time in 2000, which is less than a 5 percent decrease.
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Nationally, housing starts fell less than expected in October, which suggests the home construction industry continues to buttress the economy.
Executive Director of the Rhode Island Builders Association, Roger Warren, said he thinks this year’s total number of homes built will be similar to last year with a little less activity, but he is uncertain of the future.
“By and large I think this year will be down from prior years but what happens over the next six months will be more telling,” he said. “People talk about recession and our assumption is that we’re certainly not going to be immune to that.”
Warren said any decrease in activity has been advantageous to the builders though.
“At this point our members are working on their backlogs,” he said. “And the question is when do they catch up. Now they’re just not backlogged as much.”
“They certainly couldn’t go at the capacity they were going at before,” he said. “As long as they’re fully employed, they’re in good shape.”
David Seiders, chief economist for the National Association of Home Builders, said new construction would continue to cool in the months ahead. Housing starts will average 1.44 million units at an annual rate from October through December, down 10 percent from the 1.6 million averaged in the third quarter.
Ron Smith, vice president of single-family homes for the Picerne Real Estate Group, said he noticed a sharp decrease in homebuyers closing deals on new construction in the few weeks after the Sept. 11 attacks, but the numbers shot up again after a short while.
“We’re very slightly off from our projections for 2001,” he said, “and the main drop was the two to six weeks after September 11th. People were still willing to buy, but they just didn’t want to do it then. It was like a little blip on the market there.”
Smith is confident in the building market for the future. Picerne builds higher end homes, and according to Smith has a three to five year supply of land upon which to build, with about “300 lots in the pipeline.”
“We have noticed that the demand is definitely still there,” he said.
Also confident is John Assalone. On the other end of the homebuilding market Assalone is the president of Coventry’s mobile homes builders Westwood Estates.
“I would say we’ve been very busy with modular homes,” he said. “We’ve got all we can handle with site-build homes.”
Building mostly in Coventry, Assalone said he has hardly even noticed a slowdown in the market.
“Not here,” he said. “In this area I don’t think it’s slowed down at all.”
Assalone said he is not lacking any business, but there is one thing he wished was more plentiful.
“Our only lack right now is lack of inventory of land,” he said.
Smith said recent rules and regulations imposed by towns on building permits have actually been a plus for his business.
“In a way it’s helping some builders,” he said. “What it’s doing for us is that land value is going up higher because people have less land to build on. There’s very little out there if people want a brand new house.”
