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Sluggish economy hits home builders

The short, two-word headline on a trade publication story about the outlook for the nation's housing industry probably sums it up best: Recession Time.

If higher interest rates and a general uncertainty about the economy didn't do enough damage to the nation's housing market, Iraq's invasion of Kuwait did a little more.

Housing starts nationwide are down to their lowest levels since the early 1980s and are not expected to improve anytime soon.

In Hernando County, things are no different.

The number of building permits issued by the county Department of Development for single-family homes fell by 24 percent during the third quarter of this year from the same quarter last year, dropping in every month.

"It wasn't too bad until we met (Iraqi President) Saddam Hussein," said Mark Alexander of Spring Hill's Alexander Custom Homes.

Builders were issued permits for 427 houses in the county from July through September, down from the 559 issued in 1989.

For the first nine months of this year, single-family home starts in the county were down 20 percent from the same period last year: to 1,289 from 1,612.

"The sky is very cloudy," said Jerry Beck, president of Beck Builders Inc., one of the county's largest and oldest home builders. "One cloud is the whole Kuwait thing, another cloud is the uncertainty in the real estate industry and another cloud is the savings and loan crisis."

Like other local companies, Beck Builders recently turned to the remodeling business to help offset some of the decrease in its new home business.

"I'm looking for more ways to make money. ... I think everybody is," Beck said.

Even the remodeling business, which showed signs of stability earlier this year, declined in the third quarter, according to county development department figures.

During August and September, the department issued 212 fewer permits for residential additions and alterations than it did those months last year. Figures for July 1989 were not available.

The total number of building permits issued by the county _ including those for multifamily homes, mobile homes and demolition work _ fell by almost 10 percent during the third quarter from a year ago.

The slumping housing market has resulted in some bargains for house-hunters willing to take the plunge and some cost-cutting and lower profit margins for builders hoping to ride out the storm.

"I think it's short-term," said Tommy Clark, president of Springwood Homes Inc. "You trim a little fat, you look a little more closely at the overhead and you go on."

Short-term might not be too short, though.

David Seiders, chief economist for the National Association of Home Builders, has predicted the housing slump could continue through the rest of next year.

Some local builders have similar forecasts.

"I think we've got about a year left," Alexander said. "Traditionally, these things last about three years ... and we're entering the third year."