The residential construction market here is expected to stay vibrant this year—and to be better for some builders than last year, particularly larger builders—but the market is being constrained somewhat by a shortage of developable lots and qualified subcontractors.

The forecast for continued strength in both single-family home and apartment construction activity comes on the heels of healthy gains in 2015.

Through much of the Spokane area, permits issued for single-family home construction last year reached the highest levels since before the Great Recession. A total of 944 homes with a total construction value of $252 million were permitted in unincorporated Spokane County and the city of Spokane combined last year, up from 686 homes permitted with a total construction value of $179 million in 2014. A comparable breakdown of single-family home permits wasn’t available from the city of Spokane Valley for 2015.

Meanwhile, a relative shortage of new and existing homes for sale is providing an added boost to the multifamily market as well, some industry observers here say.

“Overall, we’re moving in the right direction. The builders are optimistic. The last couple of years, they’ve had good years in terms of their volume,” says Joel White, executive officer for the Spokane Home Builders Association.

However, he says, “The construction industry workforce has been depleted and is aging, so keeping up with demand has been difficult. It’s the subcontractors that aren’t able to keep up with the amount of work that’s available.”

White adds, “A lot of my builders are struggling to find out where they’re going to build next. The larger builders are getting bigger, and the smaller builders are struggling. The larger builders are taking a bigger portion of the total permits.”

Despite the factors somewhat limiting residential construction activity, he says the Spokane-area potentially could see as much as a 10 percent gain in permits for single-family detached homes this year, which would be on par with last year.

Some of the most active residential builders here include Hayden Homes LLC, of Redmond, Ore.; Viking Construction Inc., of Hayden, Idaho; Greenstone Homes, of Liberty Lake; Condron Homes LLC, of Spokane; Paras Homes LLC, of Spokane; and Camden Homes Inc., of Spokane.

Hayden Homes early last year agreed to buy 1,200 residential lots in the Inland Northwest from prominent homebuilder and developer Copper Basin Construction Inc., of Hayden, Idaho, in a phased approach over a several-year period.

Meantime, Copper Basin said it plans to focus on its land development and multifamily residential construction, while it phases out of single-family home construction.

 

Hayden and Viking

Hayden Homes, which refers to itself as the largest privately owned homebuilding company in the Pacific Northwest, says in promotional materials that it expects to build more than 300 homes this year in the Inland Northwest alone.

Andrea Worley, regional marketing manager for the company, says 2015 was “definitely a great year for us, both in the Inland Northwest and companywide,” and she adds that based on the trends it’s seeing so far in 2016, “We’re expecting a better year than last year.”

Hayden Homes is building homes in the Eagle Ridge and River Run developments in Spokane; Creek at Chester, Taylor Cottages, and River Crossing in Spokane Valley; Harvest Bluff in Cheney; Pillar Rock in Airway Heights; and River District in Liberty Lake. 

It’s also building homes at the Tullamore and Country Meadows developments in Post Falls; Orchard Lands in Coeur d’Alene; and Corbin Crossing and Corbin Crossing Estates in Rathdrum, Idaho, as well as at developments in Pullman and Moses Lake, Wash.

Homes are “selling really well” at the Corbin Crossing in Rathdrum, and the company is in the process of launching a new phase at Harvest Bluff in Cheney, Worley says.

The big lot acquisition deal with Copper Basin has given a big boost to its homebuilding volume, she says.

Viking Construction, a longtime North Idaho-based homebuilder, is on pace to build 450 homes this year, which would be up substantially from last year, says Scott Krajack, an executive with the company.

“Generally, it’s been busy,” Krajack says. “We’re starting out stronger per month than we averaged in 2015. The biggest challenge most builders have right now is finding qualified subcontractors. It’s very, very difficult to find help. That’s our limiting factor right now.” 

Viking develops some apartment complexes, but is predominantly a single-family homebuilder, having constructed several thousand homes in the Inland Northwest since 1980. It currently is building homes in seven neighborhoods in the Spokane area, four neighborhoods in Idaho with another just getting started, and several in the Tri-Cities.

The company focuses mostly on entry-level homes in the $170,000-to-$200,000 range and move-up homes in the $250,000-to-$400,000 range.

It’s launching its newest development in Idaho, called Viking Estates, in Post Falls, just south of Post Falls High School, on 16th Avenue between Greensferry and Cecil roads, Krajack says. The subdivision has a total of 87 lots and will be developed in three phases, with the company building on 28 of those lots now, he says. Home prices there will start in the $300,000s, he says.

Viking Construction disclosed last fall that it had bought the land and building formerly occupied by the Nut Factory on the east edge of Spokane Valley, and that it plans to consolidate its offices there, although it will remain active in Idaho.

The former Nut Factory property, at 19425 E. Broadway, includes a 15,600-square-foot building and 5.3 acres of land. Viking’s main offices currently are located at 2605 W. Hayden Ave., in Hayden, and the company also has been operating a satellite office in Spokane Valley, off Sullivan Road. It expects to move to the new location later this year.

For Spokane-based Condron Homes, owner Corey Condron says, “Things are on fire. The first week of February, someone turned on a switch and this market went from good to crazy for me.”

Condron Homes, which specializes in building homes in the $300,000-to-$500,000 range, had a good year in 2015, Condron says, but he adds, “It wasn’t so much the number of homes we sold. The prices we were getting for them made it a good year.”

One of the developments where the company is continuing to see a lot of activity is the gated community of Wandermere Heights, on the west side of U.S. 395 north of Spokane. It plans to bring on an additional 44 lots there in June in the fifth phase of that development, and already is working with 15 customers who want to have homes constructed there, Condron says.

“We’re going to have a banner year in Wandermere Heights this year,” he says, adding that the planned fifth-phase building sites will include “fantastic view lots.”

Separately, Condron Homes is just starting to build homes in a new 30-lot gated neighborhood called Pine Ridge that will be located north of the Wandermere area and in which Condron is a co-developer. That development will be located east of U.S. 395, near Hatch Road on a wooded site just east of the Ridge at Midway, a 180-unit apartment complex that was developed several years ago, at 16320 N. Hatch Road.

The company just had a presale there and is building two speculative homes, Condron says.

Additionally, reflecting on overall demand, he says, “What I’m getting a lot of is custom—people with acreage out around town. I’m getting flooded with custom requests.”

Joe Frank, president of Greenstone Corp., parent company for Greenstone Homes, couldn’t be reached for comment, but that company has been constructing and selling between about 175 homes and 220 homes each of the last several years.

The company develops various types of projects, including residential. It currently has single-family home projects progressing at a number of locations, including Eagle Ridge and River District in Spokane and Montrose in Post Falls. It says on its website that it recently has released a number of new home sites at both Montrose and River District.

 

Eagle Ridge

Developer Newland Communities Inc. reports that sales remain robust at Eagle Ridge, the big residential subdivision in southwest Spokane.

“We surpassed both our lots sales goals and our home sales projections (last year), and we were quite aggressive with setting our goals. It was nice to see higher-end buyers coming back in our market,” says Lori Henriksen, vice president of operations here for the Oregon-based company.

“Last year, we had 84 home sales,” thereby completing the development’s 10th addition, Henriksen says, “and we’ve increased our 11th addition, which we started Feb. 1. Originally we planned for 80 lots, but with current demand, we increased that to 98 lots.”

The 11th addition is at the south end of the Eagle Ridge development, south and east of the 10th addition and continuing along a southern plateau there. Newland designed it with a higher percentage of premium lots than has been the norm, Henriksen says. Improvements to the new lots there should be substantially completed by the end of July, along with paving, and “by the end of August they’ll be on the market,” she says.

The new lots are being added south of Eagle Ridge Boulevard, where all of the remaining home construction will occur. Eagle Ridge Boulevard is the main access road into the development and runs all of the way through it on a winding, mostly east-west alignment.

Newland Communities is continuing to work with the same four featured builders at Eagle Ridge, which include Hayden Homes, Greenstone, Paras Homes, and Morse Western Homes LLC, of Liberty Lake. Hayden Homes joined the roster of homebuilders there in the fall of 2013, bringing an entry-level line of homes into the largely upscale community.

Hayden is building homes starting mostly in the $190,000s and rising to $250,000, while Greenstone is building homes mostly in the $230,000-to-$270,000 range, Henriksen says.  Meanwhile, Morse Western is specializing in custom homes ranging from the mid-$300,000s to around $550,000, and Paras is constructing homes in the mid-$300,000s to around $700,000, she says.

As part of the 10th phase of work at Eagle Ridge, Newland Communities developed a 5-acre park, but decided to postpone its formal opening due to a delay in receiving a 300-foot zip line from Germany that’s a key feature in the park, Henriksen says.

The park now is scheduled to open in late July to coincide with the opening of the development’s 11th addition. It includes an amphitheater, a tree fort village, a cluster of gazebos for community gatherings, game playing areas, and an art trail loop.

“It’s 100 percent complete with the exception of some outdoor artwork” that will be provided by students from area colleges and universities, Henriksen says. “We did a unique design-build to come up with a colorful, whimsical park.”

Taylor Engineering Inc. and Clearwater Summit Group Inc., both of Spokane, worked with Newland Communities on that project.

Eagle Ridge is a 554-acre development located west of U.S. 195, four miles south of the Interstate 90 junction. The community had about 850 homes at the end of last year, and Newland Communities expects to reach the roughly 1,080-home build-out completion of the development next year.

“We have one more addition after this that will follow the same sequence as this year,” Henriksen says.

The development originally was approved for 2,300 homes, but Newland decided to leave more natural area intact throughout the sprawling community, which resulted in the total build-out number of homes being sharply reduced, she says.

 

Apartments

Multifamily-housing construction is continuing at a healthy clip here, with a number of sizable projects planned or under way around the Spokane area, including several targeted at low-income segments of the population.

Two high-visibility apartment projects currently under construction along busy arterials near downtown are a six-story, 61-unit apartment being developed at 940 N. Ruby on the west edge of the Gonzaga University campus and the $13.5 million, mixed-use Matilda Building being developed at 1002 N. Hamilton, also near the GU campus.

The complex on Ruby, owned by two California-based investors through development company 940 N. Ruby LLC and targeted at GU students, should be completed within the next few months. Baker Construction & Development Inc., of Spokane, is the general contractor on that project

 Spokane developer Kent Hull said last year that he hoped to complete the four-story Matilda Building project on Hamilton by this summer. Divcon Inc., of Spokane, Valley is the contractor on that project. The 88,000-square-foot building is expected to have retail space on the main floor, with three floors of upscale apartments above.

Hull is developing the project on behalf of CJF Ferdinand LLC, an ownership group managed by Houston Stockton, of Spokane. Stockton is the son of former Gonzaga and NBA basketball standout and Spokane native John Stockton. 

Meanwhile, Catholic Charities hopes to start construction this summer on another 51-unit residential building in the next phase of its Father Bach series of low-income apartments for the chronically homeless. The nonprofit recently submitted predevelopment plans to the city of Spokane for a four-story, $5 million building tentatively named Father Bach III, which would be constructed at the northwest corner of State Street and Second Avenue downtown.

Preliminary site plans show the Father Bach project would be the first phase of two such buildings at the former farmers’ market site at 24 W. Second.

The Father Bach III building would be modeled after the Father Bach Haven project, which opened in early 2013 at 108 S. State, and the similarly configured Buder Haven project under construction at 201 E. Second. The Father Bach Haven project was said to be the first apartment complex in Spokane devoted entirely to housing the chronically homeless.

In another project, Viking Construction is working on a $6 million, 72-unit first phase of a planned 208-unit apartment complex in Post Falls. The project site is near the northeast corner of Syringa Street and Poleline Avenue in the Fieldstone master-planned neighborhood.

Krajack said last November that the complex, tentatively named Fieldstone Apartments, would have market-rate rental units with one to three bedrooms. He said he expected units to be ready to lease in August.

The current phase includes three 24-unit, three-story buildings, a clubhouse, and a swimming pool. Krajack said he anticipates a second 72-unit phase will be constructed in about two years, and the final 64-unit phase will be constructed about two years after the second phase.