Hardin County Housing Market: Strength in numbers

Interest in multi-family units swells

By JOSHUA COFFMAN

Saturday, January 5, 2008 9:05 PM CST

HARDIN COUNTY — Like much of the country, this area does not appear to be exempt from a housing sales slump.
Building permits issued in Radcliff and Elizabethtown in 2007 for new houses dwindled from preceding years.

Antonio Vasquez works concrete for a section of curb Friday at the new Beacon Hills Apartments in Radcliff.

But that, along with an expected increase in the number of soldiers at Fort Knox, has increased demand for multi-family dwellings — condominiums, townhouses and apartments.

The bubble burst on new home sales nationwide in 2005 as sales peaked, according to the Harvard University Joint Center for Housing Studies. Market declines began accelerating in early 2006.

However, until last year, new home construction stayed strong in much of Hardin County.

Radcliff added a combined $39.8 million in new single-family home construction in 2005 and 2006, compared to $10.8 million last year.

Meanwhile, in 2005 and 2006, Elizabethtown reported a combined $48 million in single-family home construction, a figure that dropped last year to $15.8 million.

As the number of new houses being built has slowed, construction on multi-family units has increased in Elizabethtown and shifted toward apartment-style units in Radcliff, where duplex-style homes had been on the rise in preceding years.

Radcliff building permits showed strong performance in two- to four-family dwellings in 2005, totaling $12 million in new construction. That number slipped to $2.3 million in 2006, and fell off the radar last year.

However, the amount spent to build dwellings housing five or more families was $4.1 million in 2007, whereas it was non-existent in the two preceding years.

In Elizabethtown, the number of dwellings housing five or more families increased from nearly $3 million in construction costs in 2005 to almost $6.9 million in 2006 and $7 million in 2007.

John E. Wright Sr., a broker with First Time Inc., said a strong housing market in 2002 made for the worst rental market in 35 years. He said he sees the current trend as a correction in supply and demand.

His office sees more requests for high-end rentals, such as townhouses and patio homes. Expansion at Fort Knox will drive that demand as rent prices, by Wright’s estimate, have increased by about 20 percent over the last three years.

However, he warns developers, especially small contractors, not to get too overzealous.

“I think some people are getting overextended,” he said. “The people who jumped in and don’t have a background are going to get hurt.”

Jayme Burden, property manager for the Milestone Group, a division of First Time Inc., said some houses formerly for sale in the area now are being rented, a trend the National Association of Realtors identified in a report last month.

The boom in what he called “cell-phone contractors” helped speed up the pace for new construction and, if the lull continues in the housing market, could lead some of them to look for other work.

“At some point the (residential) growth kind of surpasses the demand,” he said, “and that’s where we are right now.”

The Joint Center for Housing Studies predicts that will not be the case long-term, though. It predicts an increase in immigration, as well as higher household incomes, will send the pendulum moving forward again with a solid gain projected by 2015.

Joshua Coffman can be reached at 505-1740, or at jcoffman@thenewsenterprise.com.

This story, written by Joshua Coffman, was provided to One Knox courtesy of The News Enterprise. Read more stories from The News Enterprise at www.thenewsenterprise.com.