With existing houses for sale in high demand, some homebuyers are turning toward another option: building new.

The number of construction permits issued so far this year is up about 37 percent from 2016, and has continued to climb in recent years since the recession and downturn in the housing market. Government planners and home builders see home construction market that is either staying steady with prior years or increasing slightly to match the demand in the booming housing market.

“The existing market is very picked over,” Abor Homes vice president of marketing Steve Hatchel said. “It’s driving a lot of folks who may not have considered new to new construction.”

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The average home in Johnson County sells for about $200,000, according to data from the Metropolitan Indianapolis Board of Realtors. The number of homes for sale on the market has dropped by about 100 from the same time last year, while demand has increased.

Hatchel doesn’t expect 2017 to end with a 37 percent increase in home construction in Johnson County, but does think that the number of homes built will increase by a steady 7 to 8 percent for the next several years.

Arbor homes likely will build around 100 homes in neighborhoods in Greenwood, New Whiteland and Franklin this year, Hatchel said.

Flexibility in getting exactly what they want out of their new home is a factor for buyers who purchase a new house, which is especially important with fewer existing houses to choose from and less time to make a decision with the ones on the market selling quickly, he said.

“When there isn’t much to choose from, the other option is to build something new,” he said. “Most existing stuff under $250,000 is being bought up in a day or two.”

“They can get exactly what they want, and not worry about bidding against somebody else.”

Other factors that are driving the housing market include lower interest rates, increased consumer confidence in the economy and a home construction market that is spreading further out from Indianapolis, he said.

Builders Association of Greater Indianapolis chief executive officer Steve Lains believes part of the increase is due to a rise in Greenwood home construction permits after the city settled a lawsuit filed by home builders in a dispute over construction standards.

His prediction is that home construction in Johnson County should remain steady.

In Greenwood, much of the construction has been filling existing neighborhoods, but one new one, Cherry Tree Walk, will start construction next year.

The city still has plenty of room for more home construction, Greenwood Planning Director Bill Peeples said.

“We emerged from a recession and permits have gone up steadily ever since then,” Peeples said. “There is eventually going to be a cap. We are wiggling around that cap of 300 permits a year at the most.”

Peeples said the number of homes built each year remains lower than the highest point more than a decade ago, such as when more than 700 permits were issued in 2005, because buyers can’t get loans as easily as they could prior to the recession.

Greenwood, the Center Grove Area, and Franklin remain key spots for home construction, but Bargersville has had a large increase in just the past several years.

Bargersville is the only Johnson County community that is building homes at a faster pace than the peak year of 2005 when 28 homes were built in the town. Last year, nearly 100 homes were constructed.

A welcoming town atmosphere, a good school district and available land are the key factors leading to new homes being built and more residents moving in, planning director Julie Young said.

Construction of new houses is ongoing in several subdivisions, with one new one, the 300-lot Saddle Club neighborhood, receiving approval earlier this year.

With the number of new neighborhoods planned or under construction, Bargersville’s projection is that home construction will either continue at the same pace or rise slightly over the next few years, Young said.

The homes being built in Bargersville are not aimed at first time buyers, rather the target is people looking to move-up into a larger or higher priced home than their first or previous house, she said.

In the Saddle Club neighborhood, homes will be priced from $240,000 to $395,000, according to M/I Homes.

In unincorporated Johnson County, the majority of new homes are being built in the northern part of White River Township, but there has been a slight increase in some of the rural townships, Johnson County Planning Director David Hittle said.

Most of the building is going on in existing neighborhoods, he said.

While home construction permits are up over the previous year, they are in line with the average from the past five years, Hittle said.

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Jacob Tellers is a reporter at the Daily Journal. He can be reached at jtellers@dailyjournal.net or 317-736-2702.