Quad-City home builders and real estate professionals are gearing up for what they believe will be a strong year for sales of new homes.

That hope comes despite a mixed national outlook.

Sales of newly built, single-family homes declined 11.2 percent in January to a seasonally adjusted annual rate of 309,000 units, the slowest pace on record, according to figures released by the U.S. Commerce Department.

The Midwest was the only region of the country to register an increase in new-home sales in January, posting a 2.1 percent gain from December. The Northeast and West recorded double-digit declines, of 35.1 percent and 11.9 percent, respectively, and the South saw a 9.5 percent decline.

January numbers in the Quad-Cities were flat.

Dave Falk, director of new construction and development for Ruhl & Ruhl Realtors, said that in Scott and Rock Island counties, overall sales of new housing units slipped from 13 a year ago to 12.

But Falk said he believes 2010 will begin to show noticeable improvement over 2009.

“In the first month, in middle of a hard winter, it is tough to compare. But we had more sale activities of new construction with pendings so far this year than last year and there are more pre-sold homes, where a buyer writes a contract and the builder builds it. But we will have to wait until the end of the first quarter to see what we’ve got.”

He said what the numbers do not show is the positive feedback from builders and real estate agents.

Sue Clark-Nissen, chief executive officer of the Quad-City Area Realtor Association, shares Falk’s enthusiasm for 2010.

“To me, (the numbers) show a little more confidence with consumers. If we have consumer confidence in January, it is going to follow in the coming weeks. We are holding our own here.”

Dave Prochaska, owner of Dave Prochaska Construction Inc., has been in the business for more than 30 years and formerly was a real estate agent.

Currently, he is building five homes in subdivisions, three in Prairie Heights in Davenport, one in Cody’s Hunt in LeClaire, Iowa, and one in Loft Acres in Princeton, Iowa.

“That is a lot for winter. Normally, I would be doing about three homes,” he said.

Three of the five are pre-sold, meaning they are being custom-built for buyers. Two others are spec homes, meaning they are built on speculation without specific buyers, Prochaska said.

“You used to see more spec houses,” he said. “As builders, it is easier to build spec houses, but they are also riskier. My approach is somewhat conservative: Never have more than two spec houses sitting at a time.

“Hopefully, we will see a better year than last year. But it might take five or six years to get back to where we were in 2006.”

Jared Kerkhoff of Bettendorf is owner of Jared Kerkhoff Homes Inc. He has been building homes for 10 years and serves as president of the Quad-Cities Home Builders & Remodeling Association board.

He builds mostly higher-end homes in Valley Wynds additions of Bettendorf. “It has been successful even in trying times,” he said.

He closed on eight new homes last year. While his work has remained steady, that is not the case for all builders. “It could be a lot worse,” he said. “Some people out there are not doing so well. It is tough to see that for builders. Some builders are hurting right now.”

He deals mostly with pre-sold homes. “I do one or two specs at a time,” he said, although that can be a “high-risk game. But I try to make the safe gamble. I buy land in safe places. It take what the market gives me.”

“The nice thing about the Quad-Cities is when we see inventories getting high, we put the hammers down. Right now, home builders and the real estate market are poised to do pretty well.”

Dan Dolan, owner of Dolan Homes of Davenport, is a real estate agent for Mel Foster Co. He builds home in subdivisions he has developed in Clinton, Davenport, Blue Grass and Muscatine. He found 2009 to be a strong year. But he knows it has been a struggle for many.

“I think the really scary part has passed,” he said. “I think we will have another good year.”

He said builders like himself, who construct more moderate homes, will fare better. His homes mostly are in the lower $200,000-range.

“People are watching where they spend their money,” he said. “They are looking for quality and value. They have to work with a budget.

“The national trend is homes getting smaller. That part is not going to go away. Smaller homes are more attractive, energy-effective.”

Tom Swanwick is president of RE/MAX River Cities, Bettendorf and a contractor and developer with his own company, Swany Development, building moderately priced homes, mostly in west Davenport.

“We sold four new houses already this year, and we are working on another pre-sold and another four spec houses in a month.”

Swanwick builds homes starting at about $200,000. He has been busy with new homes in large part  because of  land costs in west Davenport. He said one lot may be $30,000 to $40,000 less than a similar sized lot in Bettendorf.

Swanwick also credits programs such as the federal tax credit and Davenport Now for helping to drive  people to buy homes. “I feel real positive about this year,” he said.

His enthusiasm is shared by J.J. Condon, owner of Applestone Homes Inc., which builds custom homes, who says he is “cautiously optimistic.”

“In the Midwest, we never saw the hard times as the rest of country. Here, we put one foot in front of another, and try to make ends meet,” Condon, who also is a real estate agent for Mel Foster, said.

In his case, he sold all of his spec homes over the winter. Two pre-sold in December. “Typically this is a time where you slow down, but this winter has been crazy.”

“After a very long, snowy, cold winter, people are coming out of the woodwork,” added Teresa Rule, a licensed real estate broker with Mel Foster. “I have a lot of buyers interested. I am so busy, I am trying to stay ahead.”

Brian Bowman, executive director of the Quad-Cities Home Builders & Remodelers Association, said several factors might determine how successful the year will be.

“You have a three-layer situation,” he said. “The builders have done their part. The Realtors have done their part. But if the lenders do not do their part, you do not have anything.”

Laura Ernzen, vice president of marketing for IH Mississippi Valley Credit Union in the Quad-Cities, said the criteria for loans has changed in the past 18 to 24 months. However, she said financing is available for qualified borrowers for new-construction home loans.

Taken from www.qctimes.com.