After years of stagnation, the residential construction market in Northern Nevada is slowly finding its legs.
Developers are cautiously re-entering the market after lying dormant the past few years due to a glut of inventory and falling home prices. Most local builders are using private financing to advance a handful of homes at a time to control costs and hedge their financial risk, but even the large national builders such as Lennar are only building a few homes at a time.
Among the communities with new stick framing in 2012:
* The Ranch at Gardnerville, a master planned community
* Copper Trails in Elko
* Virginia Lake Crossing near Plumb Lane and South Virginia Street
* Villagio, a gated community off Ridgeview Drive in southwest Reno
* Verona at D'Andrea.
KDH Builders of Reno, which is erecting homes at The Ranch at Gardnerville, is working on the first residential development in five years in Douglas County. The developer, Wealth Strategies Development Inc., says inventories of new and existing homes in the county has fallen roughly 47 percent since the onset of the recession.
Northern Nevada Homes of Reno could erect as many as 12 homes at its Copper Trails project in Elko by the end of the year, says Manager Rob Fitzgerald. Each residence in the proposed 146-home project is being privately financed.
Capstone Communities, which re-restarted development at Virginia Lake Crossing earlier this year, expects to build as many as 20 homes this year. Capstone purchased 38 finished lots and an additional 40 mapped lots at the site. Development at the community is being privately funded, says Capstone Communities partner Mike Branson.
Desert Wind Homes also is using cash rather than bank debt to finance construction of a few homes at a time at Villagio, a 54-lot subdivision with 27 finished lots. Homes are priced between $500,000 and $600,000.
Custom homebuilder Homecrafters currently has nine houses under construction six at Monte Rosa off the Mount Rose Highway, and another three at Somersett. It's a large increase in volume compared to the past few years, says Homecrafters co-owner Travis Means.
More importantly, Means says, the volume of new construction, especially for high-end homes, points to more buyer confidence and economic stability than in past years.
Homecrafters employs seven people, including the two owners. The company is subbing out nearly all aspects of work after self-performing work back in the construction heyday.
"I think this year will be better than 2011, which was better than 2010," Means says. "We are in the midst of a very slow recovery."
One of the region's more active builders plans to erect roughly the same number of homes this year as in 2011. Lennar has seven active communities in northern Nevada: two in Sparks, three in Reno and two in Dayton.
The company's most active communities are in south Reno and east Sparks.
Dustin Barker, division president, says effects of low interest rates combined with low sales prices and stabilizing consumer confidence are finally beginning to trickle into the homebuilding industry.
"Three years ago there was just so much uncertainty that no one was willing to take any steps off their position," he says. "Now people are gaining some confidence in the economic times we are in and are able to make bigger purchasing decisions."
Activity is picking up in the Lake Tahoe Basin as well, says Barry Lease, president of Incline Builders and a board member for the Builders Association of Western Nevada. Lease says he's seeing more plans for bid pass across his desk this construction season than in past years.
"We are seeing things turning up and are seeing more activity in the marketplace, not only in commercial but residential as well," he says. "It is kind of almost double what we saw last year, at least for this time of year."
Incline Builders is working on two homes, a new build and a remodel in Truckee and at Lake Tahoe. He attributes some of the increase in activity to the allure of the Lake Tahoe Basin.
"A lot of people love the area, and it's just a place people want to be a part of," he says. "That's kind of what we see up here. It's mostly second homes or people who want to spend more time here."
