Contractors and industry observers here say theyre optimistic about the construction market in 2008, despite having seen building permit volumes fall sharply this year overall.


Values for permits issued during the first 10 months of 2007 in Spokane County and the cities of Spokane, Spokane Valley, and Liberty Lake totaled $641 million, down 18 percent from the year-earlier period.


Spokane had the steepest rate of drop, at 30 percent, while permit volume in the county fell 19 percent. Spokane Valley and Liberty Lake appear to be bucking the trend. Spokane Valley issued construction permits valued at $113 million during the first 10 months of 2007, up 41 percent from the year-earlier period. Liberty Lake issued permits valued at $43 million, up 10 percent.


The overall decrease, however, should be kept in perspective, observers say.


The decline in permit values at the city of Spokane follows a record-setting 2006, says Sean Shields, the citys permit specialist.


Normally it would be alarming, he says of this years lower values. Permit values this year, however, still were on pace to make 2007s total valuations the third highest on record, he says.


Shields says hes anticipating permit valuations will be flat in 2008. Much of the major work permitted in 2006 occurred this year, and some of that work will carry over into 2008, he says.


Projects valued at about $70 million that are expected to get under way in 2008 are working their way through the citys building permit process, Shields says. They include the $12 million YMCA/YWCA facility planned near downtown, and the $8.2 million WinCo Foods Inc. store planned on North Nevada.


James Elmer, president of James W. Elmer Construction LLC, says the Spokane company has been busy in 2007, and he sees no letup in 2008.


This year was the biggest year for us, and next year will be better than this year, he says.


Elmer says he sees plenty of indication that 2008 will be a strong year for commercial construction.


I hear architects and engineers talk, he says. They are all busy, and that translates into work for us.


Kate McCaslin, president and CEO of the Inland Pacific chapter of Associated Building Contractors Inc., shares Elmers optimism.


McCaslin says interest rates for construction loans remain attractive to contractors, and the rise in the cost of construction materials may be easing.


Im not hearing as many complaints about it as I was, McCaslin says.


Doug Smith, Liberty Lakes director of planning and community development, says big commercial projects there are helping to boost the citys 2007 permit valuations to what might be a record.


The city expects to issue permits in 2008 for the first phase of the Hawkstone mixed-use development, formerly known as Liberty Village, on the south side of Appleway Avenue in east Liberty Lake.


If we also receive some big commercial applications, 2008 could be another record year, Smith says.


New-home construction is slowing down countywide, following two big years, says Joel White, executive officer of the Spokane Home Builders Association.


In Spokane and unincorporated Spokane County combined, 1,396 permits were issued for new single-family residences in the first 11 months of this year, down 17 percent from the year-earlier period.


The number of permits issued by the city of Spokane Valley, however, increased 19 percent through October.


White says most of the slowdown in permit applications occurred in the last few months.


A lot of buyers are on the sidelines waiting to see what happens, he says.


While many builders pulled back on new housing starts, sales of new houses in 2007 arent far off the 2006 pace, White says.


The Spokane Association of Realtors Multiple Listing Service says 1,124 new homes were sold in Spokane County in the first 11 months of this year, down 11 percent from the year-earlier period.


Still, White says economists are bullish about home construction in Spokane County in 2008, and expect demand for new inventory to be rising again by May or June.


There is a lot of underlying demand for new construction, he says.