The Building Industry Association of Northern Kentucky (BIA) has released their mid-year construction data for 2017.
“For the first time since the great recession ended we differ from single family U.S. housing starts in a positive manner. While the nation decreased 9.31% over the prior year’s first six months Northern Kentucky increased 3.19%,” said Brian Miller, Executive Vice President of the BIA.
“Today it is all about supply as the demand is there. You either have it or you don’t.”
With regards to single family housing that means if you can create a supply of new homes you are doing quite well in a new reality of an anemic supply of homes in the resale chain.
A deep dive into BIA data reveals that the top three builders in Northern Kentucky capture over 68% of the market. Prior to the recession that number was in the 40’s.
BIA attributes that to their supply of financing, workforce and lots. Small to mid-sized builders find it increasingly difficult to develop land given the stranglehold that regulations and local land use policy place on the industry. The ability to secure financing for multiple speculative homes and an adequate workforce to keep pace is a constant issue.
It comes down to the three “L’s”; labor, land and loans.
Campbell County is emerging as a real player and supplier of new residential communities and for all practical purposes has caught up with Kenton’s production as a result. BIA believes Kenton County could easily turn the tide if only for a new direction in land use policy.
“As time has shown’ people respond to an increasing supply of new homes in good communities that they want to live in,” said Miller.
“Our remodeling subsector is cooling in volume, while still experiencing general hyperactivity, but the value of the projects has increased 21 over the prior year. This is welcomed news as our Registered Remodelers are experiencing larger remodeling projects on average meaning a more profitable business.”
Overall commercial investment in the area has leveled off after climbing for several years to a healthy range.
“When you dig into the data there is healthy activity in new construction in Boone County but then it becomes sporadic,” Miller said. Fits and starts would be an accurate picture of new commercial activity in Kenton County, decreasing to levels seen back in 2012.”
He said new commercial activity is practically nonexistent in Campbell County that continues to bump around the bottom. ”
Kenton has the roads and rail lines necessary in many locations to provide Commercial and Industrial parcels to the market that are sorely needed. Boone County currently has available land and an available supply of businesses that are expanding over and above its neighboring counties, which equates to adequate infrastructure to provide for the growth we are experiencing. Campbell County is restricted by topography for larger footprint commercial and industrial structures,” concluded Miller.
The mission of the Building Industry Association of Northern Kentucky is to promote and enhance the integrity and visibility of the construction industry and the members of the organization through advocacy, communication, education and political action.
