Higher building activity fails to excite Quarterly permits up, but April is sluggish

May 24, 1992|By Kerry O'Rourke | Kerry O'Rourke,Staff Writer

Residential building activity in Carroll is up this year compared with last year, but builders say the market hasn't recovered yet.

"It has its moments," said Allen Gartrell, a South Carroll builder who builds two or three houses a year.

Residential building permit applications in Carroll in the first quarter of this year were almost double the number for the same period last year, according to the county Bureau of Permits and Inspections.

But April figures, the latest that are available, are about even with last year's.

In the first quarter of this year, builders applied for 308 residential permits. During the same period last year, they applied for 155.

In April, they applied for 110 residential permits. In April of 1991, they applied for 104.

"April and May have been disappointing," said Jeffrey B. Powers, president of the Carroll chapter of the Home Builders Association of Maryland.

"The market has dropped a bit. There definitely has been a slowdown in the last 60 days," he said.

Powers, owner of Powers Construction Co. in Westminster, builds homes in the $130,000 to $210,000 range in South Carroll.

In January, he said he hoped his sales this year would be 10 percent to 15 percent higher than last year's. This week, he revised that estimate to 5 percent to 10 percent higher.

"It will be better, but not as substantial as I once thought," he said. "I'm still bullish the fall will be strong," especially because interest rates are expected to drop, he added.

M. Lynn Rill, vice president for residential real estate loans at Carroll County Bank and Trust, said last week the average interest rate on a 30-year fixed-rate mortgage was 8.25 percent.

The lowest rate this year came in the first week of January, when a homebuyer could get a 30-year fixed mortgage at 7.875 percent, he said.

Last week, the rate on a 15-year fixed mortgage was 7.875 percent, Rill said.

After January's low, interest rates rose until hitting a plateau in March and have been falling since, he said, adding that he expected them to continue to drop.

Rill said the bank's commercial loan division is being selective when lending to developers. Bank customers with projects in Carroll usually get priority, he said.

"We want to stick with our customers during lean times," he added.

Sales of new and existing homes in the county are up 37 percent for the year compared with last year, according to the Greater Baltimore Board of Realtors.

But Robert W. Awalt of Ellicott City, who builds homes in The Greens in Westminster, cautioned against reading too much into the increase.

"Last year was absolutely horrible," he said.

In 1991, Awalt said, he built two or three homes in The Greens; this year, he expects to build 12 or 13.

The market is improving in Carroll, but it never will reach the highs of the late 1980s, in part because builders won't have the abundant supply of land they had then, he said.

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