From masonry to appliances, housing tide lifts area businesses

Print
Font Size:
Default font size
Larger font size

Posted: Sunday, January 13, 2013 12:00 am

Baltazar Sauceda just bought three high-tech cutting machines to outfit a $1.75 million facility that will replace one that can't keep up with demand for his natural stone used in fireplaces and landscaping.

Husker Siding, Windows & Roofing expects to hire three more sales reps whose base will be a new two-story showroom and lab that shows products in action.

Meanwhile, Dave Janke Plumbing is busy devising how to replenish skilled trade workers.

From mason shops to builders, many businesses that adapted during some of the worst years of the construction industry now are reaping benefits of a re-energized housing market. While the industry is not back to pre-recession levels — a bonanza most doubt they'll see again — those who survived say they emerged smarter and prepared for a new year they believe will match or exceed the upturn of 2012.

“Every day, it's been a step up,” said Sauceda, whose Baltazar's Stone operation had record sales last year. “I didn't expect it to be as good.”

Consider these year-end highlights for the Omaha-Council Bluffs metro area:

>> For the first time since 2005, the annual number of building permits issued for new single-family houses went up instead of down. City planning records compiled by the Greater Omaha Chamber of Commerce showed a 5 percent increase over 2011.

>> Growing at a faster pace was the amount of permits for new apartments, up 25 percent over 2011.

>> Jumping 17 percent since 2011 was the sale of existing homes, transactions that often involve property renovations.

Elliot Eisenberg, a Washington, D.C., economist formerly with the National Association of Home Builders, said the national market is rebounding as well, although at a slower pace than in the more conservative Omaha market, which didn't have extreme swings.

“After so many years of being a drag on economic activity, housing is now the fair-haired child,” along with the auto and energy industries, Eisenberg said.

The good news for the broader community, he and others said, are the ripple effects. According to the National Association of Home Builders, for every 100 homes built, an estimated 324 short-term jobs and some $23 million flow into a local community.

“From the moment the ground is dug up to the final landscaping, so many people touch a house,” Eisenberg said. “Moreover, these people who touch a house spend money. They're buying gasoline, getting their hair cut, going to a local restaurants. Add these up and you've got a tremendous amount of jobs.”

Jason Henderson, an Omaha economist with the Federal Reserve Bank, said the positive signs he's seeing will mean job growth and wage gains and a stronger metro economy in 2013.

Among signs he noted: People are selling houses quicker (average time on the market in 2012 was 65 days, down from 72 the previous year). Realtors are seeing bidding wars again. Contractors are going back to work. New homeowners are buying furnishings.

“Those are all positive signs,” Henderson said.

Record low interest rates and housing prices are helping to drive the recovery, said Judd Cochran, regional manager of U.S. Bank Home Mortgage in western Iowa and Nebraska.

In volume, Cochran said 2012 was the best year his region had since he took over in 1998 — and that was without a federal stimulus package that boosted business in preceding years.

His Omaha region saw a 15 percent increase in loans for newly constructed or existing home sales, Cochran said, and a similar hike in home refinancing business from 2011.

Reflecting, in part, the housing uptick, U.S. Bank in Omaha also saw an 18 percent increase in small business lending in the first three quarters of 2012 compared with the same 2011 period.

“We're seeing a renewed injection of capital back into businesses by owners for equipment, lines of credit for payroll, things of that nature,” said Travis Havlovic of U.S. Bank. “We're happy to see they've made it through some tough times.”

Nancy Sempek, who bought Christensen Drywall Construction Co. from her dad, said she noticed a “big change” in business in 2012. That's across the spectrum, she said, as her clients include low-income housing for Habitat for Humanity as well as million-dollar homes.

A chunk of business for the 64-year-old family drywall company, said Sempek, came from residential renovation projects.

Tom Allen, operations manager for Husker Siding, Windows & Roofing in the Elkhorn area, said his firm also dealt with an increased number of homeowners with enough renewed confidence in the housing market to upgrade properties.

“That's been a real shift,” said Allen, a former mortgage officer. “Homes are a good investment again. No longer is there that crushing fear that houses are going to be upside down, and no way out.”

The 15-year-old Husker Siding, meanwhile, changed its business model, Allen said, and focuses more on referral business from Realtors, lenders and others who work directly with homeowners. He said that emphasis, along with a two-story showroom made to mimic a small village, is expected to pay off in as much as a 20 percent increase in sales.

Last year, Husker saw a 5 percent increase in sales, said Allen, even without hail-related storms that helped the previous year.

Kent Wirges, president of Dave Janke Plumbing, said that while his company is “nowhere near” its 2009 peak, it nearly doubled the amount of new homes it worked on in 2012 compared with a lackluster 2011.

The company cut back from 75 to 45 workers during the slowdown. Wirges said he's holding off on sizable change until there is clarity on how the health care law and other changes will affect the company. But in anticipation of more work this year, particularly in new apartment complexes, Wirges and others in the building trades are exploring ways to beef up the skilled labor stream.

“There is business out there to be had,” said Larry Peterson of Larry Peterson Construction. He said his contracting business had to turn away work last quarter because of a shortage of qualified framers.

Henderson, the economist, said laid-off craftsmen were forced into other industries after the housing collapse. He said firms now are competing to draw workers back, and training programs likely will be needed.

Despite negative aspects, merchants said the downturn forced them to sharpen operations.

Sauceda added a manufacturing arm to supplement installation jobs. He marketed his customized natural stone products in other states. He expanded inventory and display space to show customers what a new stone-accented fireplace or facade could look like.

The masonry operation that started in a house in the mid-2000s is expected to move next summer to seven acres Baltazar is buying near Sapp Bros.

The immigrant son of a Mexican stone worker, Sauceda said that while a rebounding housing market was key to increased demand, his survival didn't come without long work days and family sacrifice. The company ended 2012 with record gross revenue of about $3 million.

Sauceda says the proposed warehouse would have eight times the outdoor and more than twice the indoor space as the current building at 14981 Grover St.

“At one point we thought we were going to have to close the doors,” he said. “Now here we are.”

Contact the writer: 402-444-1224, cindy.gonzalez@owh.com

Copyright ©2014 Omaha World-Herald. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald. To purchase rights to republish this article, please contact The World-Herald Store.


SPOTLIGHT »

Inside Business
To submit an announcement for "Inside Business", click here. For questions call (402) 444-1371 or e-mail announcements@owh.com.

World-Herald Alerts

Want to get World-Herald stories sent directly to your home or work computer? Sign up for Omaha.com's News Alerts and you will receive e-mails with the day's top stories.