In spite of an increasingly fragile economy, local subdivision developers see good things in the future.
High Pine Estates, a new subdivision in the Angel community northwest of Jacksonville, will bring in eight new homes, according to developer Tucker Pritchett. The Calhoun County Commission approved the development during its last meeting.
“We've got one house finished that's set to close in the middle of April,” Pritchett said. “We're fixing to start a couple more.”
Pritchett, 25, said his father, P.D. Pritchett, has been building homes in the area for more than 30 years, mostly building spec houses — as in speculative, homes built in search of a buyer, rather than custom homes sold in advance — and developing land. Pritchett has been building homes and selling them since he was about 21, he said. The subdivision is his project, he said, and one that seems like a sure bet. COVID-19 has slowed the economy, but not local home sales, he said.
“Usually they sell about as quick as we can finish them,” he said. “We've got one of the houses we're fixing to start over there, it's sold, and we're meeting about another pre-sold over there. It seems to be a pretty hot area.”
High Pine could eventually have as many as 34 lots, if development continues through the second and third phase of planned construction, expansion that's some time away, and subject to county approval, Pritchett noted. He's only building about two houses at a time, he said, avoiding overinvestment. With caution, he said, the coronavirus is a storm real estate sales can weather.
“I'm not looking forward to it, but I'm not necessarily sweating it, either,” Pritchett said.
Everett King, founder of ERA King Real Estate, had similar sentiments, speaking by phone from Key West, Fla., where a lockdown had kept him for the last few weeks.
“This isn’t the fourth quarter of 2008 and the next seven years, where we didn’t know what, when or how it would end,” King remarked. “While it’s the worst thing I’ve personally lived through, it’s gonna end.”
King said that when the virus crisis ends — within at least two months, he hopes — the real estate industry will still have historically low interest rates to work with, a standing demand for homes and an economy he said the industry predicts will come back strong.
Meanwhile, he said, his eight offices and roughly 400 employees are working long-distance with clients. About 20 years ago, he said, the business may have had to close. Now, technology has made working through social distancing simple.
“We close virtually, we write contracts virtually and we can walk through a home like we’re standing there next to you,” King said.
There have been some shakeups at the national level for large real estate companies. Zillow, an online real estate marketplace, announced Monday that it would stop buying homes in the 24 markets its home-buying program serves (which doesn’t include Alabama), in light of public health orders in several states halting non-essential business operations.
At the state level, though, optimism seems abundant. Morgan Ashurst, president of the Alabama Association of Realtors, wrote in a statement last week on the association's website that the “market has been at an all-time high for so long we all knew a correction was coming,” but he also noted that interest rates for buyers are low, lending institutions are active and “we still have an inventory problem in every market.”
The county was ranked by the Center as one of the top five markets in the state for the sale of newly constructed houses in January; 19 percent of the county’s home sales were new construction (compared to 34.7 percent in Athens, the top-rated market), and new home sales in January jumped from four last year to 26 this year. Overall sales were up 25.2 percent in January over the five-year average of 98, up to 131 closed transactions.
Nick Arnold, developer of the Deerfield subdivision in the DeArmanville community east of Oxford, is another developer working to create more homes. Arnold just had the second phase of development at Deerfield approved by the county last month; the phase will add another 18 lots to the original 22, about 10 of which are still available, he said Wednesday. Work on the second phase has been slow, not because of the virus, but because of relentless rain. The property has a new road cut into the earth that's just waiting to be paved during a good break in the weather.
“I hope within the next 30 days we're putting asphalt down,” Arnold said.
Arnold's bankers and investors are telling him that the COVID crisis shouldn't cause long-term problems for his business, he said, and he's had success filling in houses so far.
“We'll feel some effects, but it will be brief,” Arnold predicted.