Friday, August 19, 2022

A look at how Covid-19 is hitting the Wilmington-area construction industry

Construction workers build a single-family home Wednesday in Canby Oaks, a new neighborhood off Masonboro Loop Road. (Port City Daily photo/Johanna F. Still)

NEW HANOVER COUNTY — Though the construction industry has taken a stronger blow nationwide due to the coronavirus, in the Cape Fear region business is holding up, according to some.

Rendered an essential business, projects underway are still in the works, and builders continue to pull new permits across the region.

Related: Welcome back to the 80s? Traffic in Wilmington down 35% since stay-at-home order

In Leland, for example, new residential building permits doubled last month compared to the same time last year. In unincorporated New Hanover County and the City of Wilmington, the number of new residential building permits was down by 27 in March, a 17% decrease compared to March 2019 and down three permits from the month prior in February.

Cameron Moore, executive officer of the Cape Fear Homebuilders Association, cautions against reading too far into this dip. The slight decrease is more weather-related than it is a reflection of coronavirus impacts, he said, adding it may still be too soon to tell.

“When we’re off 30 permits, that’s not a slowdown,” Moore said. “This is not a COVID number. It’s not reflecting anything in my opinion that deals with coronavirus.”

Though it’s a year-round business, construction and real estate are seasonal industries. Activity peaks in the spring and fall when the weather is nice and people tend to buy houses. Because of this trend, Moore said many builders like to time submitting their permits around a six-month work schedule to get their product on the market in time to catch the spring and fall uptick in buying.

In contrast, Moore said his 1,250-member organization is observing strength in the sector. “We are seeing, particularly on the construction side, we are still seeing things move forward with a pretty brisk pace,” he said.

Accessory permits up

New residential and commercial permits in unincorporated New Hanover County and the City of Wilmington were down slightly in March. An industry expert says this isn’t necessarily a sign of coronavirus-related impacts, which may be noticeable in the coming months. Note: Carolina Beach, Kure Beach, and Wrightsville Beach data not included. New R-2 Multifamily units not included in commercial figures. (Port City Daily graph/Johanna F. Still)

Nicholas Gadzekpo, New Hanover County’s Building Safety Director, said his department is observing decreased permits for new homes, townhomes, duplexes, mobile homes, additions, and alterations.

“Data accessed by the department for 2020, when compared to 2019, shows decreases across the board for all categories except residential accessory structures,” Gadzekpo said of the county’s first-quarter data.

All but one category is down: accessory structure permits. A new shed, garage, pool, decks, and other structures require these accessory permits. Last month, accessory permits increased by 37% compared to February (a difference of 21 more permits). Compared to the same time last year, accessory permits more than doubled.

This uptick is likely a response to stay-at-home orders. With more people stuck at home or out of work, many may be looking to occupy their time by improving their property.

Adaptations

Nationwide, new home construction ‘starts’ were down by an estimated 22% in March compared to February, according to U.S. Census data released Thursday. Despite the downturn, starts were 1% higher nationwide when compared to March 2019. Multifamily housing (apartments and condos) took a steeper hit nationwide, down 31%, according to the National Association of Homebuilders.

“For an urbanized area we have certainly been more insulated,” Moore said.

Relieved that the organization’s lobbying efforts landed, Moore said North Carolina’s homebuilding industry is far better off than states where it was rendered non-essential. Half-built homes can pose a hazard to the community and waste resources, he said. “Being deemed an essential service was key.”

So far, Moore has observed difficulty with remodeling projects that were already underway while people continued to live in their homes when restrictions came. Some efforts were put on hold, while some projects carried on with new safety precautions. “You have to continue because now that you’ve opened up the house, you have to button up that house,” he said.

The real impact in the Cape Fear region will be more tangible in the coming months, Moore said. “We’re working through current inventory levels. The challenge is going to be, what does it look like six months from now when we don’t have those pipeline approvals coming in?”

With some public hearings on hold due to gathering restrictions, Moore said bigger projects would see delays. Depending on how quickly businesses are permitted to reopen, slowed manufacturing plants may also result in supply chain difficulties. “If I can’t finish the house or this window that we were going to put here, I’ve either got to re-source the window or wait for it to come it.”

Low mortgage rates could help tide over wary investors and consumers that recently lost in the stock market. Nearly all new listings have shifted to virtual tours, Moore said, and people are still buying and selling houses (Nearly all signs of market health in the tri-county region showed increases in March compared to March 2019, according to data compiled by Cape Fear Realtors).

“I think we’ve adapted,” he said. “Our industry has moved to adapt to what has been the new reality the last three weeks.”


Send tips and comments to Johanna Ferebee Still at johanna@localvoicemedia.com

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