Family-owned Henderson builders hope 'cooling' trend housing doesn't slow housing progress

HENDERSON, Ky. − New home construction in Henderson and Henderson County has been limping along in recent years.

Consider: In 1994 the city and county codes offices issued permits for construction of 199 new single-family residences. But home construction in recent years has been just a fraction of that: 41 new houses in 2020, 54 in 2021 and, with two months left in the year, just 28 in 2022.

An exception is brothers Chris and Mark Stone. Under either their Hugh Stone & Sons Construction LLC or HCM LLC corporate monikers, they have secured 20 permits to build new single-family homes in Henderson since 2020 — amounting to nearly one out of every six new houses built during that period. Only Habitat for Humanity comes close as a local home builder, with 11 permits during those three years.

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The Stones are third-generation home builders in Henderson. They say their grandfather Grover Stone was an entrepreneur who started building houses here in the 1960s, developing Broadview Subdivision off U.S. 60-East and building homes in Frontier Subdivision, among other locations.

“He did a lot of farm houses,” Mark Stone said.

Their father, Hugh, quit his job as a schoolteacher in 1976 and began developing subdivisions such as Summerhill behind Aqua City Swim Club, then Stepping Stone Lane as well as Brookstone and Cobblestone drives on the back side of Balmoral Subdivision, among other developments.

Hugh Stone also began developing Canoe Creek Subdivision off South Green Street in the late 1990s. The second phase of that development, called Canoe Creek II, launched in 2018.

“That’s when we got involved” with it, Chris Stone said.

Today, their father is “mostly retired, though he is still around a lot,” he said. “He owns the development with us” while Chris and Mark now own Hugh Stone & Sons as well as HCM.

The Canoe Creek development features more than 100 lots and has progressed to Canoe Creek II, Section 3, where the brothers are actively building homes today.

Local homebuilding took a big hit during the Great Recession.

“2008 and the recession really put a hamper on it,” Mark said. “Several builders just did other things. Subs (subcontractors), too. There were a few of us left, and we made it work. We have a good reputation.”

“The way Chris and I operate,” Mark said, and his brother finished the thought: “We don’t hire it all out” to subcontractors.

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“We get out of the truck,” Mark said in a framed house they’re building on Kayak Lane. “We’re here every day. We’re very hands-on, from the foundation to the finishing” inside the houses. “We grew up watching Dad frame. We’ve been doing it our whole lives.”

At Canoe Creek, the Stones offer a variety of floor plans. “Canoe Creek II has been smaller, about 1,300 square feet with two-car garages and three bedrooms and two baths,” Mark said.

“We squeeze a lot into 1,300 square feet,” he said.

Those homes sell for around $190,000 to $200,000 or more, often depending on whether a homebuyer requests add-ons and what kind of interior finishes they select. “They’re virtually semi-custom,” Mark said.

“If you’re a new homebuyer, this is your market,” Chris said of the current phase of Canoe Creek. “Of if you’re older and ready to downsize.”

Or newcomers. Mark said half of the new homes they’ve sold in recent years have been purchased by people moving to Henderson from other cities or states, some of them returning to their native Tri-State.

The COVID-19 pandemic that started in spring 2020 certainly presented new obstacles such as the widespread labor shortage, supply chain interruptions that drove up prices of materials, the highest inflation rate in four decades and the resulting hiking of interest rates, including mortgage rates. Mortgage rates have more than doubled over the past year, from an average of 3.09% for a 30-year fixed-rate mortgage in November 2021 to around 7% today.

That’s put a dent in interest from prospective buyers of new homes. “We’re still getting calls, but not as many,” Mark said.

“I’d refer to it as a cooling,” Chris said.

Like other builders, they’ve seen an increase in the cost of some materials — in some cases, up two- or three-fold. “Lumber, vinyl, plastic — some of it is hard to get,” Mark said. “We went through a period where we could hardly get windows.”

“Or siding,” Chris added.

“But we’ve worked through that,” Mark said.

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Now they’re looking to the future.

“Since this (Canoe Creek development) has worked out very well, we’re looking for new ground where we can build,” Chris said. “We’ve identified three places, maybe four, that we’re actually looking at. Henderson could use it, but I’m not sure if it needs to be overwhelmed” with new subdivisions.

That’s in part because some developments are full or nearly full with completed houses, leaving attractive lots scarce.

“I think Henderson needs a variety of sized houses,” Mark said, and the brothers have over the years built a variety sizes. “We’ve done a lot of big (houses, as much as 5,000 square feet) and we’ve done a lot of small,” he said.

They intend to build more.

“You hope the economy doesn’t go (flat),” Mark said. “But right now, it looks like a pretty bright future.”

This article originally appeared on Henderson Gleaner: Henderson real estate market: Local builders hope to buck trend