LENOIR CITY, Tenn. (WATE) — East Tennessee home builders are enjoying a boom in building starts and anticipating more strong new home sales in 2021.
Several reasons, including low interest rates, low inventory and lower cost of living, are leading to the spike in building permits and attracting new people to the area.
However, the supply chain for some manufactured products is behind schedule due to the COVID-19 pandemic. One home buyer says once supplies ramp back up, more new homes may be sold than “ever before.”
John Cook is president of Cook Brothers Homes. He and his brother opened two new communities, including The Grove at Cedar Hills, in Loudon County in 2020 and their homes are selling. Crews are busy and working long days building new homes at The Grove.
However, last spring as the pandemic hit, he and other home builders were not as optimistic then as they are today.
“We are selling them at a faster rate than we can build them,” John Cook, Cook Brothers Homes president, said. “On our scattered lot side of the company, we are sold out until October on our starts. I didn’t expect that last year at this time. But by last year in August and September, it became evident that’s how far out we were going to be.”
“I was concerned that we were going to see a hit. I was concerned that the whole market was going to slow down. That was the same thought of most suppliers, vendors, manufacturers. Most of them stopped production, or at least put it on hold for a little bit. Until they realized — this is going in another direction.”John Cook
Ashley Burnette is executive vice president of the Home Builders Association of Greater Knoxville. He says the near record-low mortgage interest rates are helping to drive the sales of new and existing homes.
“There are people buying homes just as fast as we can build them and put them up for sale,” Burnette said.
“I think the rates may have inched up recently, a little bit. But it’s still very affordable time to borrow money, and buy a home and move in. Obviously that access to credit makes it easy for consumers as builders put them in the ground.”
The latest 2020 building permits report for nine East Tennessee counties shows overall a 16% increase compared to 2019. The biggest rises are 56% in Jefferson County, 34% increase for permits in Anderson County, and 28% in Loudon County.
“Last year, I think when the numbers shake out it’s going to be one of the strongest years for building just on the permits and jobs completed,” Burnette said.
For skilled tradesmen, there are plenty of jobs available.
“The trades, every trade person that we have is looking for help,” Cook said. “There is a ton of employment in the building trade.”
When you look closely at homes under construction at The Grove at Cedar Hills, you’ll see there are no windows or doors — normally they’d be installed at this point once the house is framed and the roof is on. Due to the pandemic, the supply chain is behind for several industries.
“Primarily anything that is manufactured,” Cook said. “The three big ones are windows, appliances, and plumbing fixtures.”
As for building new homes, the outlook is bright.
“2021 we are projecting at least another 15% growth for our company,” Cook said.
Cook said he and other builders have been told that doors, windows and plumbing manufacturers are bringing more production lines online.