George Hageman's custom home company doesn't have any less work now than it did in 2008.
But Hageman, who owns G. H. Construction of Kennewick, said the work has changed with remodeling projects making up the gap in the number of homes his company will build this year.
The number of Tri-City area homes sold as of July continued to be fewer than the past several years.
But local real estate agents continue to point to the stability of the market and how similar sales are compared to years before the federal tax credit for first-time home buyers inflated sales.
Sign Up and Save
Get six months of free digital access to the Tri-City Herald
As of July, the Tri-Cities had 1,630 homes in which the sales were completed, said Dave Retter, Windermere Real Estate/Tri-Cities owner and broker. Of those homes, the average sale price was $201,186.
The number of closings may be lower than the same time in 2010, when there were 2,055, but the average home price a year ago was $195,144.
Tri-City real estate agents said 2010 was an anomaly because of the federal tax credit for first-time home buyers and that artificially inflated the number of sales.
This year is similar to 2008 and 2009, where there were 1,797 sales and 1,711 sales respectively.
Lower sales weren't unexpected. Paul Roy, president of the Tri-City Association of Realtors, said consumer confidence is at an all-time low. And until consumer confidence increases, he expects fewer sales as families decide to rent and wait rather than buy.
"Until our attitudes change, I think this is what we are going to see," he said.
But people who can buy still are purchasing homes, Roy said. And home prices are stable, and the inventory of homes is good.
Hageman, president of the Home Builders Association of Tri-Cities, said there still are customers for custom homes, although when the nationwide recession hit in fall 2008, the market for custom homes became tougher.
G. H. Construction has gone from building up to six homes a year to building a couple, but Hageman said the demand for remodels has made up the difference.
"We are still doing the same amount of work, we are just doing a little differently," he said.
Brett Lott, owner of Lott's Better Built Homes in the Tri-Cities, said he's actually seen demand for custom homes grow.
He said he has shifted to doing more custom and few speculation homes. His company used to do about half of each in a year. Lott's Better Built Homes builds between six to 10 homes a year.
Lott, who has built homes in the area for 21 years, said he remains optimistic. "I think we've weathered the worst," he said.
He has two homes under construction now and two more about to start.
"I feel really fortunate, to have steady work and be busy, when you consider the rest of the country," he said.
The biggest problem right now is banks have tightened lending standards too far, Hageman said. In the past two years, he has had six customers who were ready and able to build a custom home, but they couldn't get approval for a loan.
Until lending policies loosen, Hageman said he doesn't expect to see economic recovery.
For people who have the money, now is the time to build, Hageman said. In addition to the low interest rates, lumber prices have decreased.
Prices are only going to go up as the economy improves, Lott said.
Interest rates are a record low at 4.25 percent for a 30-year fixed mortgage and 2.75 percent for a 7-year fixed mortgage, Retter said.
He said he expects interest rates will be raised as the economy begins to recover. That actually needs to happen for a better overall economy, he said, because at this level, banks can't make money.
Those who plan to stay in the Tri-Cities and have a secure job should at least consider whether they want to purchase a home, Retter said. Some will find it cheaper than renting.
"We are one of the most fortunate economies of the United States," Retter said.
The prices of homes have been gradually increasing, which Retter said is a good sign and points to the stability of the local market.
And the number of new homes are being sold on a similar ratio than past years, Retter said. For example, as of July, 34 percent of all the homes sold were new, a percentage similar to past years.
In July, the number of homes that went under contract to be sold that month was 20 percent of the inventory, which is close to the average of 21.5 percent for the last six years.
Since the 1990s, about 23,000 homes have been built in the Tri-Cities. Despite the added inventory, Retter said the number of homes for sale actually has remained stable. For example, there were 1,406 homes on the market one day this week, and the average has been 1,400.
That means area builders are doing a good job building new homes at a rate that doesn't exceed the demand, Retter said.
Retter said hearing about Hanford layoffs may cause people to wait to buy homes.
But most of the employees affected aren't the ones who would be buying homes, Retter said.
Just like with the national debt crisis, Roy said he expects sales to be fewer with the Hanford layoffs -- not because of the actual layoffs, but because of consumer confidence.
Some people are worried about Hanford layoffs, Hageman said. But he said the economy's diversity has grown, which should help keep the layoffs from being as devastating.