Tri-City home building on the rebound

Home building in the Tri-Cities is on the rebound, local housing experts say.

In the first quarter, 500 building permits for single-family homes were issued, compared with 169 permits in the same period last year. Total value of the latest permits was more than $112 million, the best since 2005 when 528 single-family home building permits were issued with a combined value of about $100 million.

Last fall, from October through December, 295 permits were given out with a combined value of little over $68 million.

"We expected the first quarter to be good for the Tri-Cities. But the numbers exceeded our expectations," said Jeff Losey, executive officer of the Home Builders Association of Tri-Cities. He said lower interest rates and federal tax incentives are helping the local construction industry.

Nationally, builder confidence in the market for newly built, single-family homes also improved significantly in April as consumers rushed to take advantage of a federal home buyer tax credit set to expire at the end of the month, according to the National Association of Home Builders/Wells Fargo Housing Market Index, released Thursday.

Data released Friday by the U.S. Commerce Department also shows that nationwide housing starts rose for a third consecutive month in March to a seasonally adjusted annual rate of 626,000 units from an upwardly revised February number. The rate of permit issuance for new housing construction also rose by 7.5 percent in March.

Homes under $250,000 remain a hot commodity in the Tri-Cities, Losey said, adding that housing starts in are keeping pace with the growing community. Most of the new construction is in Pasco.

Losey said he doesn't know if the Tri-Cities' housing starts will keep pace in the latter half of the year but is optimistic. Talk of the national economy reviving will surely play out locally, he said, and eventually also may help sell higher-end homes.

As that happens, people who recently have moved here and are waiting for their old homes elsewhere to sell will be able to get out of rental homes and buy their dream house, said Don Pratt, president of Don Pratt Construction, which specializes in expensive homes.

It may take six months to a year before the inventory of homes priced $400,000 and up is cleared, said Pratt, who's building six custom homes for clients.

He said he believes the community will need more houses at varying price points to keep up with the demand once the recession is over.

Most communities in Washington have seen an increase in single-family housing starts, but the Tri-City market has the best performance, said Joel Hill, Pasco-based project manager for Aho Construction, which since its inception in 1987 has built and sold more than 8,000 homes in the state. "The Tri-Cities is a fabulous place to raise a family and to retire."

Aho Construction has had 50 housing starts -- mostly in Pasco -- in the first three months of the year, Hill said. "That's up 20 percent from the same period last year," he said. The average cost of Aho homes is about $180,000.

Hill said his company was the first to build homes near Road 68 about 15 years ago.

"We saw the great potential of the area," he said. A majority of Aho homes buyers are either first-time buyers or retirees looking to downsize, he said.

Losey said the area between roads 68 and 100 in Pasco is the primary building corridor in the Tri-Cities. It's inexpensive because it's fairly easy to level it in absence of any hills, Losey said. And the opening of a new high school in the area has made it more attractive, he said.

Olin Homes, which has been building homes in Southwest Washington since 1962, has so far built and sold 12 homes in the Tri-Cities this year, up from eight in the first quarter last year, said Ivan Olin, its Vancouver-based office manager.

"We have sold another 45 homes that are under construction mostly in the Tri-Cities." Olin also is building four spec homes in Battle Ground, north of Vancouver, and four custom homes for clients in other parts of Southwest Washington.

"Last year, we were nervous like everyone else, especially in the first quarter," Olin said. His company ended up building and selling 74 homes in the Tri-Cities last year, said Olin, whose father Ron founded the company. The company's homes cost from $137,000 to $220,000 in the Tri-Cities, and from $182,000 to $340,000 on the west side.

Olin said the local housing market starts look healthy because the Tri-City economy stayed strong and home prices remained stable. Prices never escalated the way they did elsewhere. "We're building to (fulfill the needs) of homeowners, not investors."

It's reassuring for builders that the Tri-City market will continue to prosper in the year ahead, said Olin and Hill.

-- Pratik Joshi: 582-1541;; Business Beat blog at