Click photo to enlargeNew home construction in Franklin County took an unpaid holiday last year.

“The year 2011 is the worst year Guilford Township has ever had regarding new construction,” township Supervisor Greg Cook said. “We don’t see any signs of loosening up as far as development goes. We hope it does. It’s just dead, dead, dead.”

The township east of Chambersburg issued nine permits for home construction in 2011. That’s down from 22 in 2010, the peak of 125 in 2004 and the 30-year average of 66. There have been no permits for multi-family units in three years.

For the first time in at least 18 years, the township issued no permits in Penn National, a golf course community that attracts retirees from across the nation.

Many real estate agents have a tough time acknowledging to anyone that the housing market is moving at a crawl, and Patti Nitterhouse, vice president of the company developing the Penn National community, manages it with some difficulty – nationally, prices are down and sales are slow.
“We haven’t been stalled, but we’re in first gear,” Nitterhouse said. “I feel we’re up the hill now.”

Penn National had its best year ever for resales, she said. Inventory of existing homes for sale dropped from 33 to 16.

“New home sales suffer because there are so many fabulous deals with the existing homes,” she said. “We’re better than we’ve ever been because we’re a stronger value.”

Franklin County has not lost its charm to newcomers, Nitterhouse said. She’s starting a national campaign to market cottages for under $300,000 at the “resort amenity community.” Would-be buyers want to retire in a well-constructed house and close to family.

“We offer affordable, inspired living,” she said.

Maybe not as upbeat as Nitterhouse, national economists are forecasting a brighter 2012:

— Sales of new homes in December were the highest in a year. Sale prices are increasing.

— Sales of previously occupied homes in January reached their highest level in nearly two years.

— Markets for new houses are improving in small metro areas across the nation.

— Mortgage rates have never been lower, although qualifying is tougher.

A look back at 2011 shows how far the market has to go.

Just 304,000 new homes were sold in the U.S. in 2011, the fewest on records dating to 1963 and less than half that of a healthy year.

Municipalities in Franklin County issued 179 building permits for home construction in 2011, according to the Franklin County Planning Department. That’s about half amount they issued in 2010 and just 14 percent of the 2006.

A sampling of some of the largest local townships mirrored the national trend in 2011:

— Greene Township issued more permits for used mobile homes (10) than for duplex construction (one). The township led the area with 23 permits for new single-family homes. The performance was down from 99 in 2010 and 53 in 2009.

— The fastest-growing municipality in Franklin County over the past decade, Southampton Township, saw just 10 new homes, down from 14 in 2010 and 85 in 2006. “We continue to grow,” Supervisor Sam Cressler said. “It has slowed down since our heyday.”

— Home construction in Washington Township plummeted nearly 90 percent. The township issued nine permits for new homes in 2011, down from 47 in 2010 and 97 in 2006.

— Hamilton Township likewise tanked, 14 in 2011 compared to 64 in 2010 and 84 in 2006.

Buyers are whittling away at the local housing inventory. There were about 900 homes in Franklin County listed for sale in January, down 10 percent from a year earlier, according to RealEstate Business Intelligence.

But the trend is slow. Sales of existing homes were flat in January, compared to a year ago. A home took longer to sell and its median selling price was down.

The Franklin County Sheriff has 97 properties listed for sale on March 9. Property owners could not make their mortgage payments.

Sales of new homes make up less than 10 percent of the U.S. housing market, but each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.

“A lot of new home builders are doing remodeling,” said Tom Hanks, executive officer of the Franklin County Builders Association. “We are used to a certain growth and we’re not getting it. Hopefully something will catch fire this year.”

He said two things will dampen the recovery — the high price of gasoline and lenders requiring higher down payments for mortgages.

In December, Pennsylvania’s construction employment improved, while local contractors lost jobs. A local excavator earlier this month announced 60 people would lose their jobs when the company closes this spring.

A Chambersburg masonry contractor however has weathered the recession and completed his best year since 2007.

“We’re making out pretty good,” said Kurt Tolbert, vice president of Ralph E. Tolbert Masonry. “We actually picked up four projects in the last two weeks that are going to put us into October or November of this year. The work we have on the books is going to keep us busy this year.”

It’s the company’s largest backlog of jobs since 2008, he said.

Commercial, not home construction, has kept 50 employees busy during the recession, Tolbert said. The company currently has 67 employees and is building a six-story apartment building in Punxsutawney.

“To keep all our employees we had to expand our territory,” he said. “They’ve had to work four 10s and come home for the weekend. We’ve been traveling for the past two years, 200 or 300 miles if we have to, as far as Pittsburgh and Beckley, W.Va.”

His new work is back in his local territory — Chambersburg, Shippensburg and Mercersburg.

“If I look at volume of work we have and the work ahead of us I say we’re coming out of the recession,” Tolbert said. “I think what’s happening at Volvo (in Shippensburg) is a big plus as far as housing and all.”

Municipalities are budgeting for greater real estate tax revenues in 2012.

“My guess is it will be a wee little bit better than 2011,” Guilford Township’s Cook said. “I think the economy has turned the corner. I look for a better year, certainly not a great year. We might never get back to what we had in 2004, 2005 and 2006.”

For Nitterhouse, the recovery comes down to personal decisions.

“Buyers have been paralyzed by fear,” she said. “They are now starting to think with their own heads and saying: Gee whiz, there are opportunities. They are being prudent and frugal. They’re not purchasing (a home) because they’re dazzled by it.”

— The Associated Press contributed to this story.
Jim Hook can be reached at 717-262-4759 and jhook@publicopinionnews.com.