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New housing starts are spotty but are visible in the Bemidji area. Monte Draper | Bemidji Pioneer

Annual Report | Construction: Contractors encouraged by better housing market

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BEMIDJI - The Headwaters Builders Association hasn't had a formal meeting in months.

But don't consider that a cause for alarm.

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"We haven't had a meeting in a month or two, but that's just because we've all been very busy recently," said Jon Jorgenson, president of the Headwaters Builders Association and co-owner of J&B Quality Construction. "I haven't talked to everybody about it but only a handful of them said that things aren't going well. Most everyone else says things are going very well for them."

Although the construction industry has been hit hard in recent years by the recession, things seem to be looking up for area contractors.

"We are very busy," Jorgenson said. "We recently hired two new full-time employees.

"Things are just looking better. We're way above where we were last year. Things are looking good."

Interest rates have lowered, which means that more people are building new houses than in years past.

Mike Miller, head building official for the City of Bemidji, confirmed the city has seen more building this year than it did last year. As of June 13, there were 213 building permits and 91 mechanical permits. About a year ago, on June 15, 2011, the number was slightly less - 176 building permits and 55 mechanical permits.

"We've definitely seen an increase in new homes being built this year," Miller said. "And we probably have double the housing startups than we did last year."

The Associated Press recently reported that average U.S. rates on 30-year and 15-year fixed mortgages fell to record lows. Rates on 30-year mortgages have been below 4 percent since December and sat at of 3.67 percent as of June 7.

That's encouraging news for the construction industry.

"We hadn't built a startup home for a new couple in over four years," Jorgensen said. "This year we've got two. That's encouraging."

Howie Zetah, owner of Zetah Construction, has also seen his business grow.

"It's a much better feel this year," he said. "People that have maybe been held back by the economy are now starting to do some things."

Zetah said he's also made two or three new hires this year due to the increased workload.

According to the Minnesota Department of Employment and Economic Development, employment in Beltrami County has indeed gone up. And the construction field has especially seen its numbers increase following some tough years when the housing market crashed.

In 2004, the peak of the housing boom, there were 1,309 people employed in the construction industry in the second quarter - the quarter generally thought to be the barometer of the entire year for seasonal work.

That number dipped to 1,188 the next year and slowly kept dropping until a low of 1,039 in 2010.

But things are looking up, slowly. In 2011, there were 1,096 people employed in construction - a slight increase, to be sure, but an increase nonetheless.

"It's more of a guarded optimism," Zetah said. "You've still got to look out to make sure it's OK. But slow growth is good growth. If it keeps going like this for 24 months or so that is a very good sign."

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Jack Hittinger
Jack Hittinger is a sports reporter for the Bemidji Pioneer, focusing on Bemidji State but also covering area high schools. He hails from the Great State of Michigan. Read his Bemidji State blog at http://thebeaverblog.areavoices.com/ and follow him on Twitter at @Jackhitts.
(218) 333-9772
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