Home builders prepare for big year

MAT-SU -- 2002 is promising to be a good year for new home construction in the Valley. The annual Mat-Su Home Show will give consumers a look at what builders, landscapers and remodelers have to offer while offering business people a chance to sell and network at one event.

Not far from Alaska State Fair's Raven Hall, where the show will take place, new houses are being finished and started simultaneously in Pioneer Meadows subdivision.

Pioneers Meadows is a three-phase development being built by Palmer-based Hall Quality Homes. The subdivision has paved streets and is sprouting houses and young trees in a once-rural hay field that is now about a 40-minute drive from downtown Anchorage.

Jess Hall, owner of Hall Quality Homes, said low interest rates are driving much of the new home construction.

"When I first started building in the early 1970s, rates were about nine percent and today they are about seven [percent]," Hall said. "You have to go back before my time to find them lower."

Hall said he suspects that 30 or 40 percent of the new home market is made up of new people moving to the Valley from Anchorage and elsewhere.

Alaska has no reporting laws for real estate sales, which makes figures such as new home sales elusive. Mat-Su Borough Assessor Karl Borglum said the borough's assessment department estimates 900 homes were built last year in the borough, up from about 600 in 2000. Those are rough figures, Borglum said.

The assessment office is putting together more detailed reports on 2001, which he will present to the public next month. Borglum said the borough has six assessors in the field year-round to keep track of activity.

"I estimate that we get 98 or 99 percent of [new houses] counted," Borglum said.

Another indicator of growth in the Valley is the number of electric meters added to Matanuska Electric Association's grid. When real estate changes hands it could be speculation-- someone had money and thought buying land might be worth the risk. But when a property owner signs up for electricity, it's a sign that someone intends to stay.

The Valley had 1,418 new electric service connections last year, excluding the Eagle River area, according to MEA spokesman Bruce Scott. Some of those are commercial hook-ups but MEA officials estimate that 95 percent -- or about 1,350 -- are residential. The number of new electric service connections per year was up from 1,000 in 1997 and about 1,200 each year in '98, '99, and 2000. The spurt last year shows low interest rates coinciding with the shrinking land base in the Anchorage bowl.

Dave Perry, owner of Kustom Kitchen and Design, said new homes are about 70 percent of his business. Kustom Kitchen installs five national brands of cabinets and builds original kitchens. The company also carries flooring, has seven employees, and uses five or six dozen contractors for installation, according to Perry. Kustom Kitchen has worked statewide, but Perry said the Valley is growing strong enough that he's dropped the Anchorage home show from his marketing plans this year.

"We've done both shows in the past, but we've gotten a lot of response from this one and we can do without the Anchorage home show," Perry said.

Kustom Kitchen was founded in 1992, but Perry has been building home interiors for 27 years. He's a survivor of the pipeline construction boom who takes a more cautious approach to growth these days. The company he owned with partners in the 1980s no longer exists.

"We were quite a company," Perry said. "We had some 40 employees and subcontractors-- I don't think I want to stick my neck out that far again."

Perry said supplying new cabinets and flooring to remodelers has grown from about 20 percent of his business to 30 percent over the last two years. Perry doesn't have to rely on new construction as much today as he did in the 1980s. Low interest rates, he said, drive both sides of his business.

"I have noticed that remodeling seems to be on the increase," Perry said. "They're possibly taking advantage of the low interest rates. They may not really want a new home, but they want their home to look better."