Q&A with Howard Fortunato, vice president of the Home Builders Association of Delaware
Residential construction in Delaware has been picking up, especially in New Castle and Sussex counties.
According to the Dover-based nonprofit Home Builders Association of Delaware, overall construction of new homes in the state’s most northern and southern counties has been slow but steady over the past year.
We spoke with HBA/DE’s Vice President Howard Fortunato on what is driving construction growth, what types of homes are in greater demand and what the picture looks like in the next year.
BY THE NUMBERS
♦ 4 percent increase over the previous year for new residential construction permits in 2015
♦ 10 percent increase for new Sussex residential construction permits so far this year
♦ 2 to 5 percent increase in new home sales projected in the next 12 months
Q How is residential construction doing?
A Residential home building is doing OK. Statewide in 2015, building permits were up about 4 percent over the previous year. Delaware is still is an attractive place to retire where home prices are generally lower than surrounding states such as New Jersey and Pennsylvania. Also, property taxes in Delaware tend to be much lower.
Q Which areas of the state still have a residential construction boom and why?
A “Boom” would probably only apply to Sussex County where their permits are up 10 percent over 2015. That’s because of lower carry costs (property taxes) noted above, and I think homes are more reasonably priced, especially at our beach communities, compared to other beach locations in other states.
Q Which are most popular – townhomes, single family, condos, apartments?
A Single family and towns are both doing OK, especially in home styles with first-floor master bedrooms. Active adult communities are doing well too, as are move up communities. There are not many communities with first-time buyer products as high land prices and over-regulation makes it difficult to build for the first-time buyers. These first-time home buyers may find it difficult to purchase a home because they may have student loan debt or may be facing other financial hardships.
Q Do you foresee that new residential sales in the state will continue to do well in 2016?
A We foresee a slow, steady increase in sales this year, around 2 to 5 percent. However, major job losses in Delaware will hurt sales – i.e. the layoffs at DuPont, Chemours and other local firms. Not only do these job losses reduce the pool of available buyers but they also tend to tamper consumer confidence.