Smithfield Herald

Clayton housing market is on the rebound

Launcged before the recession, Chandler's Ridge subdivision off of Glen Laurel Road is one of the most popular places to build homes in Clayton.
Launcged before the recession, Chandler's Ridge subdivision off of Glen Laurel Road is one of the most popular places to build homes in Clayton.

After a decline in buyers during the recession, the housing market in Clayton is on the rebound with more people building and buying.

According to town planner David DeYoung, in 2012 the number of housing starts soared compared to the year before. In 2011, Clayton issued 22 building permits for single-family homes, DeYoung said. Last year, the number ballooned to 147, more than a sixfold increase.

Meanwhile, the numbers of permits for multifamily housing units, including apartments, climbed from zero in 2011 to 200 in 2012.

“What this tells us is people want to move here,” DeYoung said.

Already this year, the town has issued 98 building permits for single-family homes. This puts Clayton on pace to surpass last year’s total. And DeYoung expects Amelia Station to apply for permits for 216 apartment units by the end of the year.

Subdivisions approved by the town before the recession have resumed building. One of the most popular is Chandler’s Ridge, where a steady stream of building is underway.

“We’re seeing construction in pretty much all facets of housing, from senior-living communities like Gabriel Manor to apartments like the East Village,” DeYoung said.

Gabriel Manor, an assisted living center with 77 beds, opened in late July. East Village, with 150 apartments, is under construction.

DeYoung attributed the housing rebound to expansion at companies like Grifols, Caterpillar and Novo Nordisk, all of which have added or will soon add jobs.

Before year’s end, health care company Novo Nordisk plans to add 25 jobs at its plant on Powhatan Road. On N.C. 42 East, Caterpillar has opened its Machine Development Center, which employs about 200 people. Across the road from that testing facility, Caterpillar plans to add more jobs at its assembly plant.

As Clayton’s population grows, so will its amenities, said DeYoung, who predicted the town will one day boast a Target, a movie theater and Chick-fil-A. Already, burger chain Char-Grill is nearing completion of a restaurant off of U.S. 70 Business near Amelia Church Road, and the folks behind the Cleveland Draft House plan to build in Clayton.

Realtors’ perspective

In his eight years in Clayton, real-estate agent Frank Devoid has witnessed the decline and rebound in the housing market.

“It’s gotten consistently better in the last year,” he said.

Devoid said he sold twice as many homes in 2012 as he did in 2011.

Many of the sales, he said, were to military retirees taking advantage of the variety of mortgage options available to Clayton-area homebuyers. Some of those options, including loans from U.S. Rural Development, are not available elsewhere.

Such loans are available in rural towns – those with 10,000 or fewer people. In Clayton, where the population has topped 17,000, town leaders hope the next farm bill from Congress will redefine rural to mean 20,000 or fewer people. Otherwise, access to Rural Development loans will dry up.

The U.S. House and Senate have already passed farm bills; in September, the two will try to iron out the differences.

“I will be watching that very closely to see what happens in September,” Devoid said.

Other popular loan options in Johnston are federal loans to veterans and so-called 203K loans from the Federal Housing Administration. The 203K loan, which is fairly new to the market, is for buyers who plan to renovate older homes.

Like Devoid, Realtor and developer James Lipscomb, of Home Towne Realty in Clayton, said the housing market has improved.

“I think you’ve got a more-savvy buyer, and builders have been making more efficient products,” he said.

While interest rates remain relatively low at about 4 percent, they’re climbing again, and Lipscomb said that’s affecting how much house people can afford to buy. Someone looking at a 2,200 square-foot-house six months ago is now facing a higher mortgage payment or looking for a smaller house, he said.

And because of rising material costs, builders are bumping up the price of new homes by $5,000 to $10,000, Lipscomb said.

Devoid said he has also seen an increase in short sales. In a short sale, a bank sells a house for less than what it’s worth because the owner has said he can no longer make the mortgage payments. Short sales are bargains for buyers.

“What’s really popular are ranch-style homes,” DeVoid said.

Ranch-style houses, most popular from the 1940s through the 1970s, are usually one story, which means all of their bedrooms are on the ground floor. This appeals to anyone who doesn’t want to climb stairs.

DeVoid said he has not seen much activity in the high-end market, where houses are priced at $300,000 and more.

“Hopefully banks will start lending money to custom builders again, and we’ll see more nice neighborhoods,” DeVoid said.