Builders prepared for boom to go bust

Permits to build new houses in Wake County are down 40 percent from a year ago, officials said, as builders and buyers find it more difficult to finance their projects.

"The building will come to a standstill," developer Dan Tingen said.

Tingen said he can't purchase lots or get loans to start construction, and he's having more trouble selling homes already under construction.

"Our company is still very creditworthy; the banks are just unwilling to lend the money," he said. "The buyers that we're having for the most part are willing to pay the price we're asking, but their inability to get financing is where the crisis is going to come."

Another Cary developer has plans to put 30 new homes off Evans Road, but he said he wouldn't even start the project until the economy improves.

In Holly Springs, the economic uncertainty has slowed construction at 12 Oaks, a planned golf course community. Wakefield Development Co. said future phases will depend on market demand.

"I think banks are just nervous about lending any money to anyone, especially when it comes to the real estate market," said Tim Minton, executive director of the Home Builders Association of Raleigh-Wake County.

The credit crunch has affected commercial properties as well. The Lafayette and The Hillsborough, two mixed-use towers planned for downtown Raleigh, are both months behind schedule in lining up their financing.

Tingen, who has been in the home-building business for 28 years, said he's prepared to ride out a long slowdown. He said he might work on only 10 homes next year – about half the number he does in a good year.

"If you came to me and said, 'Dan, I've got a neighborhood I'd like for you to look at,' I'd say, "Come back in about three years,'" he said.