Four of the top five Inland Northwest home builders in 2005 remained in that elite group in 2006, but were joined last year by Sullivan Homes Inc., which moved up from 10th place, according to an annual building-permit list compiled by Cedar City, Utah-based Construction Monitor Inc.


All but one of the top builders saw their total permit values fall in 2006 compared with 2005, when the home-building market was red hot.


Hayden-based Viking Construction Inc. remained the top single-family home builder in the Inland Northwest market in 2006, with building permits totaling $39.3 million. In 2005, Viking was issued permits worth $55 million, the list shows. Construction Monitor defines the Inland Northwest market as including Spokane, Stevens, and Pend Oreille counties in Washington state and Kootenai and Bonner counties in Idaho and the municipalities that operate within those counties.


Wendell Olson, president of Viking Construction, says he doesnt expect the housing market to regain its feverish pace of 2005 anytime soon, but predicts that there will be a healthy level of activity this year.


05 was kind of a crazy year, a boom cycle year, Olson says. I dont think well go into that boom cycle again for quite some time, but thats good for the housing industry and good for the consumer.


Sullivan Homes, of Spokane Valley, moved up to second place in 2006, with permits totaling $23.3 million, almost double the $13.4 million in work it received permits for in 2005.


Greenstone Corp., of Liberty Lake, which was bumped to the No. 3 spot from second place in 2005, had a total of $20.7 million in permits last year, less than half of the $54.7 million it notched a year earlier. Fourth-ranked Condron Construction Inc., of Spokane, which also moved down one place in 2006, had a total of $16.9 million in permits last year, compared with $25.7 million in 2005. Coeur dAlene-based Hallmark Homes Inc., which held its fifth-place ranking, posted $15.6 million in work last year, down from $24.5 million in 2005.


The rest of the top 10 home builders for 2006, ranked in order from sixth place to 10th, were Spokane-based Paras Construction Inc., Coeur dAlene-based Victory Homes, Spokane-based Lanzce G. Douglass Inc., Copper Basin Construction Inc., of Hayden Lake, Idaho, and Hayden Enterprises Inc., of Redmond, Ore.


Sullivan Homes growth was fueled primarily by a surge in the upscale single-family home market here in the last few years, says Brett Sullivan, the companys vice president. Sullivan Homes built 99 homes last year, with an average permit value per home of $235,000, according to Construction Monitor. Its average permit value was significantly higher than that posted by Viking Construction, which was issued permits for a whopping 235 homes, with an average permit value of $167,000. By comparison, Greenstone had 127 permits averaging $163,000 each, Condron Construction also had 127 permits, but an average value of $133,500, and Hallmark had 98 permits with an average value of $159,000.


Sullivan Homes, which formed in 1996, decided early on to focus on the upper-middle to high-end home sectors, which Sullivan says means that the average overall price of its homes, including the lots they sit on, ranges from the $300,000s up into the $500,000s and above. He says that focus partly is because members of the Sullivan family who are involved in the company had prior experience in that housing segment. The Spokane areas job growth and overall robust economy in recent years also have contributed to the companys increased activity, he says.


We started seeing strong growth in 2004, Sullivan says. Its about being in the right communities at the right time, particularly in your market niche.


One such community is Liberty Lake, where the housing market has been growing briskly, he says. Sullivan Homes is working in Black Rock Development Inc.s upscale Legacy Ridge subdivision there, where Seattle-based Street of Dreams Inc., which organizes luxury-home tours, held its first home show in the Spokane area last summer.


Sullivan Homes expects to start building homes this year in the first phase of Liberty Village, a proposed mixed-use community in Liberty Lake thats planned to include more than 500 lots eventually.


Sullivan Homes work in other subdivisions includes activity in the big Morningside neighborhood in Spokane Valley, where average prices range from $400,000 to $500,000; WildRose Country Estates in North Spokane, where prices range from $500,000 to $625,000; and an upscale waterfront community in Sandpoint called Bottle Bay, where prices start at $1.8 million.


Joel White, executive officer of the Spokane Home Builders Association, agrees that the budding high-end home market has been contributing to overall housing growth. In 2003 in Spokane County, just 35 new and resale homes in that upscale market segment were sold, he says. In 2006, the number of home sales in that category shot up to 149, from 109 in 2005 and 47 in 2004, White says. He attributes the growth in the upscale home market to a healthy economy and heated construction activity.


Theres been a strong influx of new residents to Spokane in that market (segment), and theres been a lot of local citizens who have done very well in the last couple of years, White says.


A healthy market


In 2005, building materials prices jumped about 40 percent, which in turn raised home prices significantly, says Olson, Vikings president. Meanwhile, investors were gobbling up properties then flipping them and resulting in a glut of housing inventory in 2006. Nearly 60 percent of the companys home sales were to investors in 2005, whereas investors now make up only about 5 percent of its sales, he says.


Almost everything we do now is owner-occupied, which is a good thing, and healthy for my industry, he says.


Olson anticipates that construction costs in 2007 will stay in line with costs last year, as will home prices. Viking Construction, which built roughly 35 percent fewer homes in 2006 than in 2005, likely will see either flat growth this year or perhaps build 10 percent to 15 percent more houses, he says. The company currently is working in subdivisions such as Hawks Nest, in Coeur dAlene, which eventually is expected to have 1,000 homes; the 380-lot Strawberry Fields in Hayden; the 1,000-lot Fieldstone development in Post Falls; and three neighborhoods on Five Mile Prairie with a total of 200 lots. It also plans to develop a nearly 200-lot subdivision, called Traditions, in Airway Heights.


Viking Construction focuses on starter homes and move-up homes, priced in the $170,000 to $350,000 range, and plans to stay in that market niche, Olson says.


Corey Condron, vice president of Condron Construction, says that while that company has gotten off to a slow start so far this year, it expects demand will pick up in coming months. For the past 30 years or so, Condron Construction, similar to Viking Construction, has focused on the type of homes that now are priced in the $200,000 to $350,000 range, he says. Home buyers in that category include first-time new-construction buyers, first-time move-up buyers, and seniors who are looking to downsize, he says.


This company is structured for production housing, not high-end detailed homes, Condron says. Were comfortable and doing fine there, and we expect that market is going to get real busy here soon.


The company, which, according to Construction Monitor, had 68 fewer permits in 2006 than in 2005, anticipated a decline in home construction last year from its hurried pace in 2005, Condron says. At the time, the company had welcomed the break in activity. Now, though, it hopes to ramp up construction as the weather improves to reach its goal of building 150 homes this year, or at least match its 2006 level of 127 homes, he says.


It slowed off too much, Condron says. Back then (in 2005), my panic button was that we had too much work, and now were hoping that it will get a lot better.


Sullivan says he expects the Spokane-area housing market will be strong this year, but that the company likely wont grow at the same stellar rate it did last year. Sullivan Homes expects to build 80 to 90 homes this year.


Contact Emily Brandler at (509) 344-1265 or via e-mail at emilyb@spokanejournal.com.