Mostly downward-tracking permit statistics and a still-uncertain outlook continue to plague residential construction here, but builders have seen an upswing in prospective buyer interest in recent months that bodes well for the rest of the year.

Last year, the three largest jurisdictions here—the cities of Spokane and Spokane Valley, and Spokane County—issued a combined total of 683 permits valued at $131.1 million for new single-family homes.

That represented a 15 percent decline in the number of permits and a 5 percent decline in total valuation from 2010, when 802 permits valued at $138.2 million were issued, data from those jurisdictions show.

Adding in new townhouses, duplexes, and apartments, they issued a combined total of 757 permits valued at $216.9 million in 2011. That represented a 16 percent decline in the number of permits, but—due to increased apartment construction—a 3 percent rise in total valuation from the prior year, when 898 permits valued at $211.1 million were issued.

Builders of single-family homes here have continued to find it difficult to compete against existing home prices that still are being pressured downward by distressed and bank-owned properties. That inventory, though, is shrinking, and the recent surge in interest among prospective buyers has caught some builders pleasantly by surprise.

"I definitely think the market is improving. Buyers are very interested. Everyone wants to move forward," says Joel White, executive officer for the Spokane Home Builders Association.

"There isn't great confidence (in the economy) yet, but we're seeing a lot of activity. We're seeing a lot of lookers, but they aren't buying yet, so there's a pent-up demand for new housing. There's a lot more optimism in the industry right now," White says.

Some builders, though, are seeing more than just lookers.

Corey Condron, president of Spokane-based Condron Construction Inc., says, "So far this year, we're off to a pretty good start. We're picking up sales this first couple of months, and the activity has dramatically increased out there with prospects."

Calling it "a strange time of the year for this to happen," he says the company first saw open house activity start to pick up around Thanksgiving, followed by increased visits to the company's website and other online activity. "Offers started coming in the door after the first of the year," he says.

"If we keep this pace up, we're going to match last year's production (in number of homes sold) in the first four months of this year," Condron says.

Condron Construction, one of the Spokane area's more active builders of single-family homes, currently has five under construction.

"I'd like to say we're going to build another 40 this year" if the momentum continues, which would be up significantly from last year, Condron says.

Developments in which his company is building homes include Wandermere Heights, north of Spokane; Prairie Breeze, on Five Mile Prairie; Silver Hill, at Medical Lake; Sekani at Cross Pointe, in Airway Heights; Eagle Ridge, in South Spokane; and Farr Meadows and Highland Estates, in Spokane Valley. Most of the homes Condron Construction currently is building are priced at less than $250,000.

Of what's causing the upswing in buyer interest, Condron says, "I think it's people are getting tired, tired of being in a depression, sitting on the sidelines." Encouraging national news about falling unemployment and improvement in other economic indicators also probably is having a positive effect on consumers' collective mood, he says.

Greenstone Corp., of Liberty Lake, also has single-family home projects progressing at a number of locations, including Kendall Yards, Eagle Ridge, River District, Bella Vista, Ponderosa Ridge, Bidwell Park, Montrose Park, Rocky Hill, MacKenzie Beach, and Coeur d'Alene Place.

New homes

At the Kendall Yards urban village, on the north bank of the Spokane River just northwest of downtown, Greenstone has built and sold more than 40 residential units, most of them townhouses, since acquiring the property in 2009.

On its website, it currently is marketing 22 additional townhomes in Kendall Yards, which are in various stages of design and construction, with asking prices ranging from $158,000 to $405,000.

Following brisk sales of its modestly priced homes there, the company announced last summer that it plans to build 10 higher-priced homes, which would include four upscale townhouse units and six custom-built single-family homes.

That high-end portion of the development, called CityView, will overlook the Spokane River gorge and downtown Spokane. Some of the custom houses might exceed $1 million in value, says Jim Frank, Greenstone's CEO.

The CityView houses and townhomes will be the first residences in Kendall Yards to be erected south a recently constructed section of Summit Parkway, which bisects the planned 78-acre urban village, Frank says.

Including the CityView area, the homes completed and currently under development in Kendall Yards represent most of the first phase of six envisioned residential phases in the Kendall Yards development.

At Eagle Ridge, the big south Spokane development, owner San Diego-based Newland Communities Inc. announced about six months ago that it planned to begin work this year on a 100-home ninth phase with an estimated value of more than $15.5 million.

However, Lori Henriksen, Spokane-based vice president and general manager for the company, says it has switched gears and decided instead to focus this year on extending and completing two remaining portions of the development's 192-lot eighth phase. That includes 25 lots on the north side of Eagle Ridge Boulevard, Henriksen says.

"It's looking like it's going to be a good year," she says. "We're seeing more demand, more activity. We've seen more traffic in January and February than all of the fourth quarter last year. I think that things have truly turned the corner in 2012."

The Eagle Ridge website showed 27 homes currently for sale there priced between $160,000 and $507,000. More than 600 homes already have been built at Eagle Ridge, and the master-planned community is envisioned to have 1,100 homes and more than 160 acres of open and forested space when finished.

On the West Plains, Takoda Park LLC, a Cheney-based development company headed by former NFL football player Steve Emtman, is starting work on the first eight townhome units in a 39-home second phase of development at the Takoda Park neighborhood.

Also, a separate company in which Emtman is involved, Cheney Properties LLC, received approval in January for a third phase of development, to be called Takoda Park West. That phase calls for two single-family houses, 16 duplex units, and 20 townhouses.

Those two portions of the overall Takoda Park project have estimated values of about $4 million and $6 million, respectively. The subdivision is located on about 20 acres of land east of the Interstate 90-Medical Lake interchange and is expected to include a total of about 100 homes when completed.

Community Frameworks, a Spokane-based affordable housing nonprofit, is developing all 24 lots in the first phase and 11 lots in the second phase. Emtman's entities are developing the other 28 units in the second phase and all 38 homes in the third phase.

Apartment projects

Multifamily housing activity has been brisk here recently, with a number of the projects targeted at specific niches of the real estate market, such as seniors, the low-income sector, and people with mental illness.

Among the projects currently under way or planned to get started this year are Traditions at Mill Road, north of Spokane; Traditions at South Hill, at 3270 E. 44th; Palouse Family Apartments, at 3210 E. 44th; Sylvan Place, at 2207 E. Francis; Sprague Union Terrace, at 1420 E. Sprague; Clare View, at 3146 E. 44th; Appleway Court II, at 221 S. Farr Road; and Pioneer Park Place, at 424 W. Seventh.

Apartment developer Inland Washington LLC, of Spokane Valley, is progressing rapidly on the $12.8 million, 150-unit Traditions at Mill Road senior apartment complex. It's being developed on an 8-acre parcel of land at 12710 N. Mill Road, just north of the Fairwood Retirement Village, and is expected to be completed this fall.

The project includes a 138,600-square-foot building with three above-ground floors and a basement. It also will have seven ground-level garage structures with a combined total of 58 parking stalls lining the south end of the property and 189 uncovered parking spaces on the north and south sides of the main building, plans show. A 5,200-square-foot clubhouse is to be constructed west of the main apartment building.

Inland Washington's construction division is the contractor on the project, which was designed by The Architects Office PLLC, of Boise.

Inland Washington also is developing the $20.3 million, 232-unit Palouse Family and $14.1 million, 150-unit Traditions at South Hill projects. The Palouse Family complex will have 10 three-story buildings, each with 20 to 24 apartments. Like Traditions at Mill Road, Traditions at South Hill will have all of the living units in one building.

After a lengthy regulatory-related delay, work is expected to get under way this month on the roughly $2.6 million Sylvan Place project, a 15-unit apartment building that will house people who suffer from mental illness.

Sheryldene Rogers, director of residential development for Spokane-based real estate firm Goodale & Barbieri Cos., which is overseeing the project, says it's expected to take about six months to complete.

Frontier Behavioral Health is the sponsor for the project, which is to be located on vacant land on east Francis Avenue, on Spokane's North Side. It was awarded a $1.7 million U.S. Department of Housing and Urban Development grant toward construction of the complex, and Washington state and the city of Spokane kicked in $623,000 and $320,000, respectively, Rogers says.

The two-story structure will have 10,200 square feet of living space, including some shared space intended to encourage tenants to socialize. The building also is expected to have a small computer lab with Internet access to help residents enhance their education, apply for jobs, and communicate electronically. Sylvan Place will target people whose mental illness contributes to their chronic unemployment.

Clark General Contractors LLC, a subsidiary of T.W. Clark Construction LLC, of Spokane, will be the contractor on the project, which was designed by Michael Fancher & Associates, of Seattle.

Rogers says St. Vincent de Paul is the sponsor of a similar-sized project in Coeur d'Alene that potentially could get under way later this year and that also will provide housing for people with mental illness.

The Washington state Department of Commerce announced in November that several affordable housing agencies would receive a total of $9.9 million, most of it to aid in construction or rehabilitation of 322 low-income rental units.

Cindy Algeo, executive director of the Spokane Low Income Housing consortium, a nonprofit that promotes interagency collaboration on low-income housing development and advocacy issues, said that money would go toward construction projects valued at a total of $34.8 million.

The construction projects will add 182 units to the low-income housing rental market and update 140 existing units, all within the next six months to two years, Algeo said.

The Department of Commerce awarded the money via the Washington state Housing Trust Fund, which is funded through legislatively approved bonds in the state's capital budget.

The department awarded $2.9 million—the largest single Housing Trust Fund allocation statewide—to Spokane nonprofit Inland Empire Residential Resources as the final funding needed to start construction of Sprague Union Terrace, a four-story workforce housing project planned on East Sprague.

The project also has received more than $1 million in federal stimulus funds to be distributed through the city of Spokane and Spokane County, says Darryl Reber, executive director of Inland Empire Residential Resources.

The development will have 37 apartments on the top three floors and about 5,000 square feet of commercial space on the ground floor, Reber said. Work on it now is expected to begin later this month or in early April, and the building is expected to be ready for occupancy before year's end, he says.

Wolfe Architectural Group PS, of Spokane, designed the project, and Walker Construction Inc., of Spokane, will be the general contractor.

The floor plans include studio, one-bedroom, and two-bedroom apartments, Reber says.

Located on the former site of the Farmers Market & Garden Center and the neighboring Rocky Caf, the project is intended to serve households that earn 30 percent to 65 percent of the area median income, specifically neighborhood workers and people displaced by the North Spokane Corridor freeway project, he said.

For another project, Spokane Housing Ventures will receive a $1.5 million Housing Trust Fund allocation to go toward a dual project that will include constructing a 61-unit senior apartment building and rehabilitating a 124-unit senior apartment complex on Spokane's South Hill.

The total cost project cost is estimated at $15 million, said Dave Roberts, senior developer at Spokane Housing Ventures, a nonprofit that provides affordable housing to families with low incomes or special needs.

The new structure, to be called Clare View, will be located at 3146 E. 44th, just north of the Clare House Apartments complex, at 4827 E. Palouse Highway, which will be updated.

Whitewater Creek Inc., of Hayden, is the contractor on the dual project, and ZBA Architecture PS, of Spokane, designed it.

Appleway Court II is a planned 24-unit, $4 million second phase to the 38-unit Appleway Court low-income senior housing project at the corner of Appleway Boulevard and Farr Road, in Spokane Valley, that also has received housing trust funds. Spokane nonprofit Community Frameworks will develop the project and Spokane United Methodist Homes, which does business as Rockwood Retirement Communities, will own it.

Also receiving some housing trust funds was the $6.1 million Pioneer Park Place project on west Seventh Avenue, which will involve converting the four-story former nursing home into a 29-unit apartment building. Community Frameworks also will develop that project, and Frontier Behavioral Health will be the service provider.

Appleway Court II is in the final stages of funding development, but construction could start later this year, says Chris Venne, Community Frameworks' finance director. ZBA Architecture designed the project, and a contractor hasn't been chosen yet, but there's a good chance it will be Kop Construction, which built the first phase, Venne says.

Cortner Architectural Co., of Spokane, is the architect on the Pioneer Place project, for which construction bids are expected to be sought by this summer, he says.

Separately, Catholic Charities Spokane, one of the area's largest nonprofits, is beginning work on an $8 million low-income housing project downtown, next to its House of Charity homeless men's shelter.

The nonprofit will construct a four-story, 51-unit housing complex at 108 S. State, and plans are to have the housing facility open to tenants late this year. Spokane-based Garco Construction Inc. is the project's general contractor, and Heylman Martin Architects, also of Spokane, designed it.

The planned apartment complex will offer permanent housing to chronically homeless men and women.