Building Confidence In New Home Construction

SIOUX FALLS, SD - New home construction in Sioux Falls may finally be looking up, after plummeting over the last few years.

Construction companies that once wondered if they should stay in the business are now booked through the end of the year.

A rocky economy didn't stop Ken Frear from building an east side house last fall.

"My wife, Nancy, she is the designer and so she gets all the credit," Frear said.

It's got all the bells and whistles, from a touch faucet to a downstairs entertainment space complete with a bar area.

"We had a square design in mind originally and then it morphed into what you see here," Frear said.

Frear built because his family wasn't sold on any of the existing homes on the market.

"Every house had some of the features we liked but we couldn't find the perfect house," Frear said. "So we figured this would probably be our last house that we built so we decided to get exactly what we wanted."

And many other homeowners are getting exactly what they want too, according to Sioux Falls construction companies. As the Development Manager for VanBuskirk Companies, Ryan Jansa takes cornfields and turns them into neighborhoods.

"We've seen a remarkable up tick in activity," Jansa said. "Especially on some of our east side projects."

Last year, he said 50 percent more people bought lots and 2011 is looking even better. Builders are beginning to construct spec. homes again. In just 10 days, builders sold three finished homes in Jansa's neighborhood.

"That, to me, is the ultimate indicator that confidence is up," Jansa said. "A guy is not going to build very many spec homes if it's just going to be built and then sit. But if he builds it, sells it and can move on and build another one; that is the process we are starting to see come back."

When home construction took a nosedive, Dusty Rallis almost walked away from building all together.

"Three years ago, I was looking at going back to school," Rallis said.

But he stayed with Rallis Construction and says the builders are finally back.

"It seems like it's non-stop phone calls," Rallis said. "People are just inquiring about construction and about how the process works. It's a lot of new people coming out."

His company is booked solid almost through the rest of the year. But why now?

Home builders said one of the main reasons why they are choosing to build now instead of later, is because historically low interest rates.

"I think people finally got to a point where they realized it's really not ever going to get less expensive to build a house, so if they were ever going to do it, they are doing it now," Jansa said.

And just like many other builders, Frear said lower cost was a major draw.

"It's hard not to own a home with these interest rates," Frear said.

The Sioux Falls Planning Division says it is starting to see some activity in single-family housing permits, but are waiting to see if that continues to increase.