Mainebiz

V O L . X X I V N O. V I I I A P R I L 1 6 , 2 0 1 8 26 R E A L E S TAT E / C O N S T R U C T I O N / D E S I G N F O C U S Elsewhere, Bath is seeing increased demand for housing. Planning and Development Director Andrew Deci attributes that primarily to buyers like young professionals and young families "moving up from Portland who have been priced out of that region and are looking for a small urban community," he says. "We've got retirees, coming from hotter real estate markets who have cash and want to live in a charac- ter-rich, small Maine community." Further north, Bangor Economic Development Offi cer Tyler Collins says there's steady demand, but potential buyers are mainly eyeing old stock for conversion into condos and rentals. "A lot of vacant foreclosed homes remain from the housing crisis and they're available at prices where devel- opers can scoop them up, renovate them and make better profi t margins than building new homes," Collins says. "I think that will continue." In York, permits for stand-alone single-family construction have aver- aged 70 a year in the past fi ve years, compared with 2 in 2012. Since June 201, the town has approved 10 housing subdivisions. Amber Harrison, York's code enforcement offi cer, sees a range of housing, from a modular kit house priced at under $200,000 to million-dol- lar custom homes. Some developers are converting existing buildings into con- dos. Potential buyers include vacation- ers and seasonal residents wanting to be in York year-round. And more existing residents are looking for in-town homes. One York development is the 33-lot Turner Drive subdivision, developed by Atlantic Construction/DLJ Corp. in York. Part-owner Jeff rey Jellison says buyers range from young local profes- sionals to families and retirees. Homes built on spec tend to sell by the time the sheetrock is up, he says. Rising costs inescapable As new-home availability increases, so do prices. Building primarily for the middle- income market, with homes ranging from 2,000 to 2,500 square feet plus garage and yard, Turner Drive homes in 2017 averaged $5,000, up from $35,000 the previous year. "Now we're in the low to mid- $500,000 range," Jellison says. But buy- ers are willing to pay more. By the time the spec houses are completed, he adds, "they'll all be gone." Rising construction costs are driv- ing higher home prices, contractors say. Spugnardi says it's impossible to quote a job and not have the price of materials change if the job doesn't start in less than 30 days. "And that never happens," he says. "After a job is priced, it's at least 0 days before you start ordering mate- rial. Sometimes six months if a client is using a construction loan." One example might be the cost of red cedar shingles from Canada, used for roofi ng, which were $225 per square (100 square feet) in the early 2000s, $325 two years ago and $00 today. e added costs mentioned do not take into account rising interest rates or even the cost of a mortgage, which have increased with additional regulation on the fi nancial sector. So far, increased costs haven't slowed demand, contractors say. But Jonathan Bates, of Stone Park Properties LLC in Ellsworth, predicts it could. Bates focuses on construction and conver- sion of townhouses for leasing as the best way to maximize profi ts in a city where many tenants are local young professionals and downsizers. "When you have a single-level ranch, which fi ve years ago developed for $200,000, homeownership made sense," says Bates. "Now a single-level will be close to $350,000. Every year we see a steady increase in materials, labor, regu- lations, new codes, taxes, everything." He adds, "I think in two years new construction will come to a halt, unless you're developing leasing prod- ucts in a non-oversupplied area." Either way, with demand remain- ing hot, another problem is not enough subcontractors, Spugnardi says. Many left the business during the recession. "I'd love to see the state spend more money on vocational programs," he says. " e housing industry needs young blood. Right now, I'm using people in their late 30s to 70s. We'll fi nd ourselves in trouble in a few years if all these older gentlemen say, 'I can't do this anymore.'" Contractors agree that development in a volatile economy is a balancing act. » C O N T I N U E D F RO M P R E V I O U S PA G E WWW.BOWMANCONSTRUC TORS.COM (207) 368-2405 Your Commercial Building Solution BANGOR FEDERAL CREDIT UNION With generations of experience in the construction management field, Bowman Constructors offers value and service for a wide variety of projects throughout Maine. The diversity of our work and the specialized needs of our clients demands the ability to adapt to individual project conditions with innovative solutions and results — this is what we do at Bowman Constructors. To learn how we can bring our design/build expertise to your project contact us, today. — Kevin Bowman, Brian Bowman An award winning, family- owned, general contracting firm since 1987 Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, Every year we see a steady increase in materials, labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. labor, regulations, new codes, taxes, everything. — Jonathan Bates Stone Park Properties LLC

• Cover