Home building is once again on the upswing in Polk County and Central Florida, and a variety of factors figure into what one builder called steady growth.
In the unincorporated parts of Polk County, 1,473 single-family permits were issued in the first six months of 2018, compared with 1,107 in the same time period in 2017, said Chandra Frederick, director of the Polk County Building Department.
Frederick and Mike Hickman, founder of Hickman Homes in Lakeland, say much of the growth is taking place in Northeast Polk County. Frederick pinpointed the area to Poinciana; around Davenport; and near U.S. 27 and Interstate 4. Hickman said the greater Lakeland area, and the greater Winter Haven area, is also growing.
“Part of that growth is the availability of good neighborhoods and home sites,” said Hickman, who primarily builds higher-end homes.
Hickman says he’s definitely seen a pickup in construction this year, across the board. “Demand is there. We’re busier this year with new homes than we have been in previous years.”
Frederick said such growth is good for the county and the surrounding areas.
“The demand for construction-related workers is quite evident in our county and Central Florida,” she said. “Whether it be builders, electricians or landscapers, there are a variety of residents in Polk County who are benefitting, from an employment standpoint, as a result of the residential growth that we are experiencing.”
Hickman added perspective to the increase in building. In 2005, he said, 9,000 single-family housing permits were pulled in the county and its 17 cities. When the recession hit in 2007, there was “little to no activity” — about 800 permits a year from 2009-2011. “We spiked way up, then had a dramatic fall. We were at 1/10th of where we were.”
Many workers left the market, retired or pursued other occupations as work dried up. “That pool of labor is not there like it used to be. They are stretched,” Hickman said. “That bodes well for them.”
Ity also helps that growth is steady, Hickman said. “It’s not the boom and bust that we went through in the early 2000s. It’s a steady increase of activity.”
Hickman said there are several factors contributing to this year’s growth:
Higher interest rates and building costs are expected. “We’re projecting higher costs to build as we get further into the year,” he said. “Everyone is saying interest rates will be going up. We had a little bit of that creep from last year. Now is the time to buy as far as cost to build and interest rates.”
Demand is still there. There’s not enough housing for the increasing population, he said, but “there are still enough homes being produced to support population growth.” The U.S. Census reports 686,483 people call Polk County home, increasing at a rate close to 3 percent a year.
The value of homes is rising. “People have gotten back to valuations they probably were at in 2005. That’s a good thing. Now that people have value back, they are able to sell their little house and buy a new one. Traditionally, we would work with someone who bought a small house, then wanted to sell it and build their family a bigger home. We are seeing that same scenario again — but it’s on a reasonable pace.” The median price for the sale of a home was about $150,000 in May, up 10 percent from a year ago, according to RealtyTrac.
Baby Boomers are moving around. “They are being able to sell their homes and buy something new, or scale down to buy something newer and nicer,” Hickman said.
Younger people are beginning to buy homes. The Millennial Generation, many of whom moved back in with their parents after college — or never moved out — are starting to buy, Hickman said. “They’ve got a job, are paying down school-loan debt. I think that generation — instead of buying in their mid-20s, are doing it in their mid-30s. We are seeing a surge of 30-somethings getting into the market.”
Overall, Hickman said it’s a “very good market. Not just the building side, but from the standpoint of the community. People are more comfortable, they have value in their homes, and they are able to move around more readily.”