Tooele County’s residential construction industry appears to be at a virtual standstill, with few projects being built, sold or planned, according to industry experts.

Cindy Coombs, administrative assistant for the Tooele County Engineering Department, reported that her office issued only 69 residential building permits from the beginning of this year up until the end of May. That’s far behind the pace of previous years. In 2007, there were 221 residential permits issued for the whole year, and there were 241 residential permits issued for the entire year of 2006.

“It’s hard to tell whether things will pick up later in the year,” Coombs said.

The construction slowdown is taking a toll on local builders, real estate agents and mortgage lenders.

Bart Hamatake, owner of Hamatake Construction in Grantsville, said the warm-weather building season has been much worse business-wise for him this year.

“Things have definitely been slower now than in years past, and I think I had maybe only one bid all spring,” he said. “Usually I have six to 10 bids in the spring. This slowdown mostly has to do with people being nervous about the economy.”

Hamatake said that nervousness is having an impact down to the individual sub-contractor level.

“It used to be difficult for me to find framers, or sub-contractors, two years ago, but now I have them calling me weekly looking for jobs,” he said. “However, with sub-contractors and people who provide supplies and materials not that busy right now, now may be the time to build.”

Dan Grgich, owner of DG Construction in Tooele, said his company has also been struggling.

“I only get 10 percent of the calls I used to get last year, so I’ve lost 90 percent of all work because of the high costs to build,” he said. “I’ve even had to lay workers off because I can’t afford to keep people on.”

Grgich said the high cost of building materials such as copper, Sheetrock, concrete and wood have made it hard for people to afford a new home.

“A lot of this stuff gets so expensive, and it drives the costs of the market up,” he said. “That’s why home prices became so expensive. It doesn’t help that banks won’t give any money for spec home building, but they can’t because the federal government won’t lend them any money.”

James Robson, regional economist with the Utah Department of Workforce Services, said there has certainly been a decrease in both building activity and the issuing of residential building permits all over Utah, and that Tooele County has been no different than other markets statewide.

“Tooele County is generally in line with what’s happening throughout the Wasatch Front and the rest of the state,” he said. A big part is the tightening of lending standards, and there was also that major housing boom of ’06-’07. We saw the major slowdown start last fall, and it just hasn’t picked up yet. Things are still quite slow right now.”

Brad Sutton, broker for Coldwell Banker in Tooele, said the entire homebuilding industry is hurting because of overbuilding.

“Because there are so many houses that are already up and available, builders and contractors don’t want to build more spec homes,” Sutton said. “They don’t want to build a house unless they have a buyer in hand first. The cost of construction can also eat up the profits of a house right now.”

Sutton said lot sales in Tooele County have slowed to a crawl, and existing homes are spending more time on the market as buyers wait for prices to drop.

Hal Brostrom, co-owner of Westgate Capital Lending, said he has noticed that more people are choosing to refinance instead of purchase.

“We’re also seeing a lot less people build based off of speculation,” Brostrom said. “There aren’t a lot of people who want to build right now, because they would rather hold back and look at what the economy will do first. People have still inquired about construction loans, but they’re not going to take out any if they’re a little uncertain about the economy.”

Brostrom also mentioned that tighter lending standards have contributed to the construction slowdown. He said many people who could have bought a home before the subprime mortgage crisis now can’t because their credit isn’t good enough.

“There is very little subprime lending going on still, and most companies that gave out too many subprime loans have gone by the wayside,” Brostrom said.

Grgich said he hopes things will turn around in the near future.

“If things don’t turn around soon, there are going to be a lot of bankruptcies in this state,” he said. “A lot of people are hurting right now, and I hope things don’t get worse.”

dougrad@tooeletranscript.com