Neighborhood News
Construction market: Commercial building lags
Posted on Jul 11th, 2010

Through June, the city of Amarillo issued 1,558 permits for $155.6 million in commercial and residential new construction, remodeling, roofing and demolition projects.
That compares with the $169.7 million poured into 1,254 projects in the first six months of 2009, Amarillo permit reports show.
The city of Canyon issued permits for 53 residential and commercial new construction, as well as remodeling projects carrying a combined value of $6.2 million.
In Amarillo, residential building crews launched construction of 308 single-family homes, 52 more starts than occurred in the city in the first half of 2009.
And, those home starts accounted for almost $69 million of the 2010's construction spending thus far, surpassing the $60.1 million invested in new homes in the first two quarters of last year.
"It's a good sign that starts are up," said Lew Bradshaw, executive officer of the Texas Panhandle Builders Association. "They're building in all parts of town.
"The best thing is that interest rates are phenomenal right now. You can get a 15-year mortgage for below 4 (percent interest) and a 30-year mortgage in the 4 percent (interest) range."
In Canyon, residential construction is running "well ahead of normal," with the city issuing permits for 14 new houses in June alone, said Danny Cornelius, director of code enforcement for the city of Canyon.
"I think we usually average about 20 to 25 a year," Cornelius said."So we're doing good. We're busy."
Overall, the first six months of the year produced 22 new home starts in Canyon, projects valued at nearly $4.8 million, according to a permit report.
Signs indicate residential construction improvement could keep going, he said.
"We've got a new subdivision they're working on (installing) the infrastructure for, out east of town, called Canyon East," Cornelius said. "So we're hoping that next year will be another good year for us."
Most of Canyon's current home construction is taking place in the Creekside addition, with about half of the 50 lots either occupied by completed houses or homes under construction, Cornelius said.
Sales were spurred by an $8,000 federal income tax credit available to first-time buyers and a $6,500 tax credit available to existing homeowners, Cornelius said.
"That (the credits) really hit about the right time, particularly for the Creekside addition," he said. "There are some smaller homes, and they're priced right (for first-time buyers)," he said.
Bradshaw and Cornelius acknowledged that the credits may have shifted the timing of purchases for some buyers rather than bringing new buyers into the market.
But Bradshaw said residential construction in Amarillo has been steady.
"That's a good indication of where things are going," he said.
Amarillo's 2010 construction picture includes almost $34 million on 32 commercial construction projects through June, down from the $35.9 million spent on 19 projects in the first half of 2009.
"We've had a lot of things slow down in the city," said Tonya Felder, executive director of the Panhandle of Texas Chapter of Associated General Contractors of America. "I'm trying to be optimistic, but I don't see a whole lot coming up right now. We're not seeing anything substantial right now."
Construction contractors have cut back their staffs, and many are working projects in other areas, Felder said.
"It really appears the (downturn) hit us last. Some other places are starting to pick up a little bit," she said.
Investment in home remodeling in Amarillo didn't change much, standing at $11.8 million through June this year as compared with $11.2 million in the same period of 2009.
But the number of remodeling permits issued thus far this year - 938 - suggests the spending is spread across smaller projects because the city saw 756 home renovation projects from January through June of 2009.
"There's still quite a bit of remodeling going on," said Winston Allen, chairman of the TPBA Remodelors Council and an outside sales representative for Stock Building Supply. "So I don't know that you'd call it flat. It's kind of steady."
Materials price surges from February through May probably caused some homeowners to delay remodeling work, he said.
Allen said remodeling could pick up after the tax credit expires, as more homeowners decide to invest in their current properties rather than moving.
By Karen Smith Welch for the Amarillo Globe News