Gradual uptick in home building predicted for 2019

Home construction in Hoover is expected to continue a gradual climb in 2019, builders say.

Signature Homes, the city’s lead developer and homebuilder in terms of volume, expects to build and sell 250 to 285 homes in Hoover in 2019, President Jonathan Belcher said.

That would be an increase from 2018. Final figures for 2018 were not yet available, but for the first 11 months of the year, Signature Homes closed on 175 homes in Hoover, up from 148 for all 12 months of 2017, Belcher said.

“I feel great about it,” Belcher said of the housing market. “We still have strong affordability, and the demand is still strong. We’ve started seeing growth in the demand, and we’re excited about it.”

Citywide, there were 289 single-family building permits issued for new houses between Jan. 1 and Dec. 11, 2018, according to the Hoover Building Inspections Department. The total for all of 2017 was 266 permits.

According to Multiple Listing Service data shared by Belcher, there were 267 new homes sold in Hoover during the 12 months ending Nov. 30, 2018. That compares to 216 new homes sold in 2017, he said.

The average price of new homes sold in Hoover has increased from $431,163 in 2017 to $469,433 for the 12 months ending Nov. 30, Belcher said. And the average size of new homes being built has increased from 2,726 square feet in 2017 to 2,974 square feet in the 12 months ending Nov. 30, he said.

Jim Wyatt, director of the Building Inspections Department, said what happens in 2019 could be dependent on what the U.S. Federal Reserve does with interest rates. The Federal Reserve has been gradually increasing interest rates since 2015, and higher interest rates tend to put a damper on home sales and new housing starts.

“There’s always concern as interest rates go up,” Wyatt said. “But it doesn’t seem to impact it so far. As long as interest rates stay lower than they have been through the years, it should help. If the Fed starts bumping it up, that’s kind of a concern.”

In mid-December, the average interest rate on a 30-year mortgage was 4.9 percent, which is still lower than the average rate anytime between 1971 and 2009, according to the Federal Home Loan Mortgage Corp., a government-owned corporation founded by Congress in 1970 to keep money flowing to mortgage lenders.

SIGNATURE HOMES DEVELOPMENTS 

Of the 175 homes closed by Signature Homes in the first 11 months of 2018, half of those were in Lake Wilborn, one of the company’s new communities off Stadium Trace Parkway, Belcher said.

And Signature expects to build about 150 more homes in Lake Wilborn in 2019, he said. That includes a new sector of Lake Wilborn called Green Trails, which will incorporate some of the same energy-efficient building techniques and “smart home” technology used in Signature’s Reynolds Landing community in Ross Bridge.

Signature also expects to build 35 to 40 houses in the adjacent Blackridge community in 2019. Homes in that community sell more slowly due to the higher price point, he said. They start in the $500,000s, and there are a fair number over $1 million, he said.

In the spring, Signature plans to start selling homes in the Abingdon community, a 100-lot community off Stadium Trace Parkway that Belcher said will be restricted to home buyers age 55 and older. His company expects to complete 25 to 30 of those homes in 2019, he said.

Signature also still has about 50 to 55 lots left in the Glasscott sector of Ross Bridge and expects to see 12 to 15 houses built and sold there in 2019, Belcher said. Those homes normally cost in excess of $700,000. Signature is the developer in Glasscott, but other builders are constructing the homes, he said.

On the eastern side of Hoover, Signature expects this year to build and sell 25 to 30 homes in the Brock Point subdivision off Shelby County 41, next to Greystone and across from Shoal Creek. That 97-home subdivision, with homes priced in the $500,000s to $700,000s, should be built out by mid-2020, Belcher said.

OTHER DEVELOPMENTS 

The Preserve community, which is being developed by U.S. Steel, typically has 20 to 25 new houses built a year. 

Merry Leach, the lead real estate agent for The Preserve, said the developer should break ground on a new phase with 43 lots for custom homes in early 2019 and hopes to be building houses in that phase by the fall. That phase will include cottage-style homes and single-level house plans, which are in high demand right now, Leach said.

Construction also will continue in another phase already in progress. The builders in The Preserve are Byrom Building Corp., Centennial Homes, Embassy Homes, Fargason Building Corp., Hastings Construction and Ridgecrest Properties.

Embassy Homes also is continuing to build homes in Lake Cyrus and in the McGill Crossings community off Ross Bridge Parkway between Ross Bridge and Deer Valley.

The Hoover real estate market in general, including existing houses, is seeing a growing amount of activity, Belcher said. The number of new and existing homes sold in Hoover in the 12 months ending Nov. 30 was 1,883, compared to 1,857 in 2017, Belcher said.

The average price of new and existing homes sold increased from $316,301 in 2017 to $338,676 in the 12 months ending Nov. 30, he said.

There continues to be a shortage of houses, Belcher said. There is only about a 2½-month supply of homes for sale, and a six-month supply is deemed healthy, he said.

This story is part of our Year in Preview. See more here.