During the housing boom, new home construction helped the Victor Valley experience one of the fastest growth rates in the nation. But when the market crashed five years ago, the fall of the construction industry dragged the entire local economy down with it.
Home construction nearly ceased. The unemployment rate skyrocketed due to the loss of construction jobs. Homeowners were left with hefty mortgage payments they could no longer afford.
But the local housing market is finally showing signs of recovery, and a local developer recently received approval from the town of Apple Valley to build new homes in an existing housing tract.
"It's just now starting to make some sense in the desert (to build new homes)," said Dave Faylor, partner at Evergreen Homes LLC in Victorville. "That's why this project is moving forward."
Evergreen Homes purchased 23 graded lots in a tract near Mana and Aniwa roads, not far from the Lewis Center. The original developer built homes on 12 of the 35 lots but had to halt the project when the market collapsed in 2008.
Evergreen Homes will build semi-custom homes as new orders come in, instead of building all of them at once, Faylor said.
"We are going to start very slow," said Faylor, who called it "crazy" to mass produce homes in today's market.
His company will be ready to start building in about three months and will continue as long as he gets orders, Faylor said.
"I think it's a positive sign for the High Desert. We are finally at a point where the market will support new construction," said Jason Lamoreaux, chairman of the Apple Valley Planning Commission. "There is demand for housing. The market is very tight with inventory, and prices are increasing about 1 percent per month on resale houses."
It didn't make sense for developers to build new homes when consumers could buy short-sale or foreclosed homes at bargain prices, Faylor said, but the gap between the resale and new home markets is starting to close.
Faylor remains cautious because other hurdles exist.
"It's still going to be difficult because it's not an apples-to-apples comparison," he said. "Homes that are on the market are not going to have those amenities that are required in new construction. That adds to the burden of pricing. We believe that home buyers are astute enough to understand that, but it's going to be difficult."
Moreover, government agencies charge fees to home builders, and those fees have been on the rise. City governments and school districts in Apple Valley, Hesperia and Victorville raised their builders' fees even while home prices were dropping.
Evergreen Homes will build houses that are about 25 percent smaller than the 12 existing ones on the tract because of the current market trend, Faylor said.
The bottom line: The Victor Valley economy has historically risen and fallen with the housing market. Economists say another home construction boom will be a shot in the arm for the local economic recovery, which has been much slower compared to the coastal regions.
"We are hopeful that they'll start construction soon," Lamoreaux said. "It's a beginning of our expansion. We've been in a recovery for two years. We hope that we'll move into expansion in 2013."
Distributed by MCT Information Services
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