Archive for Wednesday, January 4, 2006

Building permits set record in ‘05 in Tonganoxie

January 4, 2006

Tonganoxie reached a record number of building permits in 2005.

According to Cathy Bard, assistant city administrator, Tonganoxie issued 128 building permits in 2005. This compares to the 86 building permits in 2004, and 111 building permits written in 2003.

Though the rooftops are visible from nearly every corner of Tonganoxie, no one is more aware of the growth -- the good points as well as the bad -- than local builders.

Developer Jack Willis was responsible for a number of the 2005 building permits. In a little more than a year, about 30 homes have been completed or started in Jackson Heights, Willis' 65-acre development north of the Stone Creek subdivision on the city's northeast side.

His houses sell from about $140,000 up to $170,000, Willis said. And they're running from 1,300 square feet to 1,400 square feet.

Willis said he's been pleased with sales.

"It's not been super great, but it's just where we could keep up," Willis said.

Willis is optimistic about sales of future houses in Tonganoxie.

"I think it's going to continue, with the four-lane highway coming through here," Willis said. "It has made it so we're not that far out from anywhere."

The four-lane highway Willis referred to is U.S. Highway 24-40 between Basehor and Tonganoxie. In November 1997, a construction project, which widened the highway from two lanes to four lanes, was completed.

And, Willis said, the area's cost of housing draws people from Olathe, Wyandotte County and Lawrence to Tonganoxie.

"The Lawrence market, a lot over there costs $65,000 for a narrow lot, where our lots are still $20,000 to $25,000 cheaper than Lawrence."

Tonganoxie developer Greg Ward is starting his development, Timber Hill Farms. One home has been finished, and sold, and another should be complete this month, Ward said. By spring, he expects to have another three houses under construction.

Ward is in the first phase, which calls for 21 homes, of his 150-home development.

"We're trying to appeal to empty-nesters and also young professionals," Ward said.

His houses, so far, have about 1,500 feet on one level, not including the garage or basement, and they're selling from about $168,000 to $187,000.

Looking for buyers

Longtime Tonganoxie builder Sam Wiles is hoping to soon find buyers to snap up his three new wheelchair-accessible homes. The price of the 1,600-square-feet homes range from $192,000 to $209,900, Wiles said.

Wiles said he's concerned that Tonganoxie's building boom might attract builders who are more interested in turning a quick profit than in building high-quality housing.

And, Wiles said, the average homebuyer wouldn't be able to know how well a home was constructed.

"You don't know what's under that Sheetrock," said Wiles, who has been building houses in Tonganoxie for 35 years. "Even though it may meet the city's code requirements, that doesn't mean it was put together properly."

And Wiles said he's concerned about how Tonganoxie is growing.

Since 1999, the city has issued 153 permits for construction of new duplexes. That's 306 living units in duplexes alone.

"Tonganoxie is flooded with duplexes," Wiles said. "Completely flooded."

And some of the duplexes, Wiles said, are unappealing to shoppers who may be looking to buy single-family homes in the same neighborhood.

Most duplex residents keep their homes looking nice, Wiles said.

"The problem you run into is the ones that don't keep their places cleaned, kept up," Wiles said.

Wiles said there's a better way to develop. For instance, he said, in the Greystone subdivision, the duplexes are at the back of the neighborhood, not along the front where all the traffic passes through. Greystone is on the north side of Sandusky, west of Leavenworth County Road 25.

The abundance of duplexes, as well as of single-family homes, is making Tonganoxie an increasingly soft housing market for builders, Wiles said.

It's a market only made worse by rising costs of materials used to build houses, he said.

"Lumber doubled to tripled in the last couple of years," Wiles said. "The price of lumber has just gone crazy since the tsunami, the hurricanes and the war."

The money angle

While the costs of building a house may be on the rise, it's possible that interest rates will stay about the same in 2006.

This week, a 30-year home mortgage at Tonganoxie banks is running at about 6.25 percent interest. The 15-year rate is close to 6 percent.

Jerry McPherson, a loan officer at Community National Bank, said he doesn't think interest rates will change much during the first half of 2006.

"I think the feds have pushed their rates about as far as they can and not slow the market too much," McPherson said.

And McPherson predicted that in the second half of 2006, interest rates might be slightly lower than they are now.

The houses that are selling best now, McPherson said, are those in the "beginner" market, priced at less than $210,000.

And while custom homes are being built for $250,000 and up, McPherson said, speculative homes in that range take longer to sell.

Charles Ketchum is another longtime Tonganoxie builder who has concerns about the way the city is growing.

"I do think they're overbuilding somewhat on the duplexes," said Ketchum, who works with his son, Ken Ketchum. "Having to drive through all of the duplexes to get to the new additions is kind of a challenge and a lot of people don't like it."

Ketchum said he's concerned about the city's burgeoning growth and the pressure it will continue to cause on the city's utility systems. In 2005, Tonganoxie upgraded its water treatment plant, which city officials estimate now is operating at 50 percent capacity.

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