new year house

Scott Obermeier, of Town Bank Builders, Lower Township, inspects the  addition on a home on Browning Avenue in North Cape May in mid-December.

Dale Gerhard

Few industries in South Jersey felt the brunt of the economic downturn as much as construction, a once-robust sector that plummeted during the recession and took thousands of jobs with it.

Looking forward to 2013, some local builders and real estate agents see opportunity for growth in segments of the industry — particularly in home renovations and repairs.

“On the whole, we’re looking for next year to hopefully be getting closer to whatever normal is,” said Rick Van Osten, spokesman for the Builders League of South Jersey.

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New-home construction will face daunting competition in its quest for growth next year, including from New Jersey’s lengthy backlog of distressed properties that are often sold at significant discounts.

This may curb demand for new homes, but it may also spur renovations and repair work at foreclosed or bank-owned properties, said Anthony D’Alicandro, president of the Atlantic City and County Board of Realtors.

“There’s a lot of distressed property that came onto the market, and there will immediately be a need for substantial renovations to homes that have been neglected, vacated or, in some cases, stripped of amenities,” D’Alicandro said. “I think brand-new construction will be stable, but renovations will see a sharp increase because of inventory we’ve been waiting to come onto the market the last two or three years.”

In New Jersey and parts of South Jersey, construction as an industry has shown signs of rebounding from the depths of the past few years.

From 2006 to 2011, Cape May County’s construction jobs were cut almost in half, and the industry still has many fewer employees than it did a decade ago.

But the first quarter of 2012 showed a 9 percent increase in construction jobs compared with the same period the year before — an average of 1,690 jobs, according to the latest available data from the U.S. Bureau of Labor Statistics.

Construction companies will be tasked with repairing damage from Hurricane Sandy in late October.

Joe O’Rourke, owner of O’Rourke Custom Homes in Vineland, said shore areas were seeing new construction before Sandy hit.

“The storm was unfortunate, but people are going to have to repair and replace,” O’Rourke said. “They may do it themselves or with contractors, but it all helps construction.”

Van Osten said 2012 was a better year than 2011 for builders, but the industry has previously seen positive signs that fizzled.

“This is probably the year that when we look back, people will say that is the year things started to turn around,” Van Osten said.

“After going through so many years of a downturn, people are scrambling to try to get back to where they were,” he said. “We went through periods before where things seemed to recover, and then it stopped.”

Nationally, sales of new single-family houses reached an annual rate of 377,000 in November, up 4 percent from the previous month, according to U.S. Census figures released Dec. 27.

The National Association of Home Builders reported in December that more metropolitan areas have seen increasing employment, housing permits and house prices for at least six consecutive months.

Along with other challenges, the industry faces tight mortgage qualifying standards, the trade group said.

In South Jersey, the region’s many second-home owners will likely affect the market in 2013.

Bob Obermeier owns Lower Township-based Town Bank Builders Inc. with his brother, Scott. He said more second-home owners are replacing cabinets, upgrading to granite, adding decks and screened porches, building wet bars or gutting and enlarging their homes.

One of the company’s projects in North Cape May involves adding a second story to a house.

“A lot of what I hear from the clients is, ‘We’ve been coming here for 20 and 30 years. We like the area. We like the neighbors. We can walk to the beach.’ They don’t want to sell their house, find another, and generally you find another and you have to renovate it anyway,” Obermeier said.

Brian Groetsch Jr., president of the Cape May County Association of Realtors, said the reduced value of some properties has drawn more investors.

“You continue to see a lot of teardowns and new construction in Avalon and Stone Harbor, so it hints the price points now are attractive for investor interest,” he said.

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