The lowest mortgage rates on record, paired with a bear market, made 2002 a year to remember for Conner Homes Co.

“The past year was great,” said President Charlie Conner. “We had strong sales everywhere.” The homebuilder is currently developing nine subdivisions throughout the Eastside and Seattle, with most homes falling in the $300,000 to $500,000 range.

Even the more expensive homes, including some over $800,000, have been selling briskly — about three or four a month — which, Conner notes, “is a little unusual because that price range is slow this year.” He suggested nice views and unique floor plans have helped boost sales.

Despite the hot housing market, talk of a real estate bubble is off the mark, Conner said. “You can print stock certificates all day long, but you can’t print land.”

He predicts home prices in the region will continue to increase as supply diminishes. “We will see a continuing relative shortage of housing with government-imposed growth constraints, which is going to continue to drive pricing,” he said.

The Growth Management Act has served to restrict the size of new housing developments. “We’re working on assemblages of a 1-acre piece or a 5-acre piece,” Conner said. “It’s taking a lot more work to find what we want.”

The trend toward smaller parcels may point toward more condominium construction, but sky-high liability premiums are putting a damper on such developments. “The future for condominium construction is uncertain at best,” Conner said, predicting the housing shortage will only steepen if multifamily housing remains unattractive to developers.

Proposed environmental regulations could make even more land off limits to developers. “You can say we have a finite supply of land,” Conner said, “but we really have a shrinking supply.”