Building business booming in Whitefish

New homes are going up in Whitefish at a pace not seen in nearly a decade.

The city Planning and Building department issued 98 new construction permits last year. That number exceeds the total for every year since 2006 when 145 permits were issued.

“Our new construction market is healthy and certainly back on pace with the period before the Great Recession,” said Whitefish planning director Dave Taylor. “I expect it to keep trending upward.”

“Every single local building contractor I know has more work than they know what to do with right now. Some of them are booked several years out.”

Seventy-three new single-family homes were built in the city last year, just below the 75 in 2013. However, an uptick in new townhouses and multi-family apartment units boosted the overall tally for 2014. There were 22 new townhomes or apartment units built last year, compared to just six in 2013.

“Townhomes are typical with resort communities, so we will always see demand for those,” Taylor noted.

Project valuations for new homes ranged from less than $200,000 up to $4.1 million. Ten new homes were valued at more than $1 million.

Taylor says that’s about normal for Whitefish.

“The million-dollar-plus houses are fairly typical for Whitefish, especially in Iron Horse, which always seems to be bustling with construction activity,” he added.

Three permits for new commercial buildings were issued, with the largest project being The Galleries at the corner of Baker Avenue and Second Street. The valuation for that project was at $2.4 million.

The construction market last year wasn’t limited to new homes, either, as permits for remodels were issued at a steady clip. The 65 permits for house remodels last year is right on target with the five-year average.

The local building boom reached its peak in 2005 when 299 new construction permits were issued. The bottom came quick, and in 2009 just 17 permits were issued.

It’s been a steady recovery since then.

David Boye, owner of Black Diamond Mortgage in Whitefish, points to a handful of reasons why the construction market continues thrive — namely the current affordability of building a home and an increased demand from home buyers.

He notes that interest rates are as much as 1 percent lower than when they peaked in the summer of 2013.

Boye also says appraisals have been supporting current purchase prices.

“The trend in home prices is increasing, making it seem like a good idea to buy before prices continue to climb,” he said. “This has caused an increase in demand.”

The increase in demand combined with a shortage of real estate offerings also could be helping the construction market, he said.

“The perception among home shoppers, in late 2013 and early 2014, that there was not an adequate selection of homes to choose from caused many builders to consider building a spec home to meet the rising demand,” Boye said.

While Taylor doesn’t foresee the market slowing down, he does say there is a diminishing supply of vacant lots in the city to build on.

“At one point we had an over abundance of affordable vacant lots from the subdivision boom of the mid 2000s, but that inventory is now diminished, which is why we are finally seeing some new subdivision activity,” he said. “I don’t foresee a huge push for subdivisions, however, as I think financing those is still problematic, and it will always be much cheaper to develop already platted lots with infrastructure in place.”

One area in Whitefish that could see growth is construction of affordable housing, Taylor said.

“Whitefish is still greatly lacking in affordable housing and rentals,” he said. “Unfortunately for service workers, school teachers, and firemen, a lot of the new construction is either custom homes or higher-end duplexes and condos.”

He said the Whitefish Crossing housing project proposed for U.S. 93 South would help address the demand.