Peninsula homes on the rise
Falling interest rates and the need for housing have helped fuel an increase in construction on the Kenai Peninsula.
Rick Abbott, manager of Spenard Builders Supply in Soldotna, said his sales are up 20 percent from last year, fueled by new home construction from Cooper Landing to Kasilof.
"Funny River, Sterling and those areas are growing," he said. "They're presold. They're not spec houses."
Sales began picking up in March, he said.
"The interest rate has helped people upgrade to a house of higher cost of change from a rental to buying their first house," Abbott said.
According to information from HSH Associates in Butler, N.J., average interest rates for fixed home mortgage rates nationwide rose from around 7 percent in early 1999 to a peak of about 8.7 percent in early summer 2000. Rates fell to about 7.2 percent early this year and now stand at about 7.1 percent. The Alaska Housing Finance Corp. rate for 30-year loans to first-time home buyers is now 6.25 percent.
Abbott said commercial construction also has contributed to the increase in sales.
"But it's not always on the Kenai Peninsula," he said.
Spenard Builders in Soldotna is supplying materials to build assisted-living housing in Palmer and Kotzebue, and it recently supplied materials to build assisted-living housing in Unalaska.
"It's our contractor clientele that deals regularly with Spenard Builders in Soldotna. We ship from Seattle," Abbott said.
Dick Bower, building official for the city of Soldotna, also credited falling interest rates for an increase in permits for residential construction.
"Last year, when interest rates were low going into the season, it looked like it was going to be a good year," he said. "When interest rates rose, a lot of projects didn't go. This year, when rates came down, a lot of people got interested in building again."
So far this year, Soldotna has issued building permits for 23 new single-family homes worth nearly $3.9 million, up from 19 permits for new single-family homes during all of last year, Bower said. However, there are still several months left in the year, and the city likely will issue additional permits, he said.
For all categories of construction, Soldotna has issued building permits for a total of nearly $8.3 million this year, about $100,000 more than the total last year.
So far this year, permits for commercial remodels total nearly $1.2 million. The city has issued five permits for a total of $2.71 million in new commercial construction, including the $2.55 million, 65-room Aspen Hotel now under construction near Johnson's Tire Service on the Sterling Highway.
At first glance, new single-family home construction in Soldotna is up about $1 million from last year, Bower said. Residential remodels and public construction are down, commercial remodels are up and new commercial construction is about the same as last year.
Marilyn Kebschull, Kenai city planner, said Kenai has issued roughly 65 building permits so far this year. The total dollar value was not immediately available.
She said the largest commercial projects are the city's new $3.7 million fire station at Kenai Municipal Airport, the addition of $1.2 million in refrigeration to the skating rink at the city's Kenai Multipurpose Facility and the construction of the $1.2 million Alaska Industrial Hardware building on Bridge Access Road.
Through the first quarter of 2001, Kenai had issued 16 permits for new single-family homes worth nearly $2.9 million, up from 11 permits during the first quarter last year for single-family homes worth $1.6 million.
In the first quarter this year, the city issued nine permits for single-family home remodels worth $127,300, down from 12 permits during the first quarter last year for remodels worth $326,000. More up-to-date figures were not immediately available.