Home Builders Feeling Good

Sentiment matches actual construction surge in San Jose

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    NEWSLETTERS

    Kris Sanchez says business is booming bigger than it has in a decade when it comes to construction projects in the South Bay. (Published Monday, Jun 17, 2013)

    The founder of Barry Swenson Builder, a San Jose general contractor, has never been busier. He has $300-million dollars in home and commercial construction projects going right now, including two hotels near Mineta San Jose International Airport and a multi-unit housing project going up at San Carlos and Meridian in the city’s Midtown neighborhood.

    “During the down time, I couldn’t even get $50-million in work. I was asking my friends, re-doing barbecues and patios, almost anything to keep busy and I’m glad I did because I kept all my crews busy during the last three years,” Barry Swenson said.

    His positive sentiment reflects the findings of a just-released National Association of Home Builders/Wells Fargo survey. A reading above 50 shows that builders feel more positive than negative. Today’s number was 52, the highest it’s been since the housing market collapse in 2006. As that positive sentiment news was released, the stock market shot up by more than 100 points.

    At least in San Jose, construction numbers back up the good sentiment.

    San Jose says permit revenue for the fiscal year that ends this month is expected to be $27.3-million, $7-million higher than projected last July.

    “We’re seeing really strong activity. The valuation for new construction for the last two years went gangbusters,” said Joe Horwedel, the City of San Jose’s Director of Planning, Building and Code Enforcement. That valuation is how much people are telling the city they’re spending on their re-models. Horwedel says in talking with the folks seeking permits, they’re feeling more financially stable.

    New home construction in San Jose is also up. In 2012, the city issued permits for 186 single family homes, and more than 3,300 apartments and condos. Contrast that with the abysmal numbers for 2009 in which only 75 new homes went up and barely more than 200 apartments and condos.

    Developer Michael Van Every of Republic Family of Companies said construction is good whether residential or commercial.

    “The more commercial jobs you can provide, the more sustainable incomes come to a city’s general fund, more residential housing provides employers with a host of options so they can decide to stay or relocate to San Jose,” Van Every said.

    City coffers are already benefiting. The permit revenue was projected at $20.6-million last July, the beginning of the fiscal year. By year’s end June 30th, it’s expected to be $7-million more than that.
    The positive trend is a welcome one.

    “We really like the better economy better than the lousy one,” Swenson said, laughing and adding, “It makes this life more livable.”