VOL. 111 | NO. 6 | Thursday, January 9, 1997
By CAMILLE H
down slightly from 95
By CAMILLE H. GAMBLE
The Daily News
The cost of labor and building materials are two of the reasons some area contractors are giving for the decline in residential home additions in 1996 compared to the previous year.
Overall, home additions in the area were down slightly last year with 1,090 permits filed, compared to 1,172 permits filed in 1995, according to county records. In the past five years, the best year for home additions was 1992, when 1,453 permits were filed in Shelby County.
"People do not have a realistic expectation about the price of home additions," said Helen Peterson of Peterson and Peterson. "They seem to think they can get an 18-by-18 addition for about $4,000, and thats not going to happen. They dont have the slightest idea of what our labor and material costs are now compared to 1991 and 1992 -
there has been quite a large increase since then.
"Building costs have gone up -
the cost of labor has gone up, along with the cost of materials," she said. "I really think that is the main reason home additions are down. Another thing is the fact that interest rates for new construction or for existing homes has been quite low, and people who would ordinarily add on are moving to a bigger house."
Peterson, who does additions, remodeling and home repairs in the Memphis market, said the home addition activity in 1997 will depend on mortgage interest rates, the availability of move-up housing and the cost of labor and materials.
Bob Stifolter, president of the Morris Co., does home additions, remodeling and new construction. He said his company had a 130 percent increase in work volume in 1996 over 1995, due mainly to an increase in home additions.
Stifolter, who also works in the North Mississippi market, said the market is very strong in Memphis. "We have experienced a brief increase in the cost of materials over the last 12 to 14 months," Stifolter said. "I anticipate another increase in the materials expense in the spring of 97."
Stifolter said currently home additions in the Memphis market average from about $55 to $65 per square foot.
Ben Duke of Ben Duke Builder LLC said he did as many if not more residential additions in 1996 and 1995 than in previous years, and he attributed the increase to the area of Memphis where his work is concentrated.
"I think 96 was probably stronger as far as people doing large additions," Duke said. "I had more high-end work in 96. You will find more of that in East Memphis than any other part of the city.
"I think the East Memphis market is appreciated dollar-wise a lot more to where people can afford to do remodeling work," Duke said. "People might have owned a house for 10 years, and it would be a situation where that house is appreciated so much in value, based on whats there already, that it affords them to borrow the money to do the remodeling work. They might have bought it for $50 per foot, and with the remodel it would now be worth $100 per foot."
Dukes observation of the East Memphis remodeling market coincides with building permit figures in Shelby County. In the 38117 ZIP code (East Memphis) building permits were up in 1996 with 99 permits filed, compared to 88 in 1995. The 38111 ZIP code (University of Memphis area) remained steady with 84 permits filed in 1996, compared to 85 in 1995. Residential home additions were down in Germantown in 1996, with 108 permits filed for construction in the 38138 ZIP code, compared to 120 filed in 1995. The number of Midtown home additions remained steady in 1996, with 25 permits filed in the 38104 ZIP code, compared to 23 in 1995.