Fewer builders pull permits than last year; more projects behind
schedule
Morgan Hill – The Morgan Hill Planning Commission’s quarterly home building report shows an increasing number of projects that are behind schedule.
According to the report, 14 of 20 projects scheduled to be done this fiscal year were behind schedule Sept. 30. Furthermore, only 50 of the 125 building permits expected to be pulled by Sept. 30 were in fact pulled.
The comparable numbers last year were six behind-schedule projects and 120 permits pulled.
The Morgan Hill City Council approved the report Dec. 6.
Planning Commissioner Ralph Lyle said the numbers suggest the housing market isn’t looking as “bullish” for 2007 as some home builders are saying. He was mostly responding to optimistic views expressed by real estate representatives in a Dec. 1 Times article.
In the article, Jim Pedicini, CFO of Dividend Investments, a large developer based in Morgan Hill, told the Times the city’s home prices could rise along with Bay Area prices as the market heats up over the next two years.
“If it was going to be so great, one would have expected these projects to be on time,” Lyle said. “Since it typically takes six months to build a house, a ‘bullish’ 2007 outlook should have resulted in these units getting started.”
Morgan Hill Planning Director Jim Rowe said the Bay Area housing market is still recovering after hitting a low point in recent years.
“Locally, new home builders have said that sales dropped off and they have had to offer incentives to attract buyers,” Rowe said.
In November, Dividend Investments issued a $30,000 coupon that could be used to reduce closing costs.
Lyle said the reality of the numbers is that real estate sales people are not yet planning or acting as if 2007 is going to be that great.
“The building community has been writing letter to get both schedule and cost relief for their projects,” he said. “This is inconsistent with the view that home demand is high and future prices will continue to appreciate.”
In Morgan Hill, the number homes – including apartment units – under construction is 213. Dividend Investments’ Mission Ranch, a development on Cochrane Road east of Highway 101 that will eventually hold 328 single family homes, is currently selling four to five bedroom homes at $1.2 million.
Almost 30 homes are under construction and 100 are already built.
Tony Burchyns covers Morgan Hill for The Times. Reach him at (408) 779-4106 ext. 201 or tb*******@*************es.com.
