Homebuilders: Construction Returning to Pre-recession Levels.

YOUNGSTOWN, Ohio -- Despite a harsh winter and rainy spring, more new houses have been built in the Mahoning Valley so far this year than at this point a year ago.

How rough was last winter?

“I put 500-gallon propane tanks at four houses and in a month and a week, my bill was $10,000 – for heating the houses so their foundations wouldn’t crack,” says Bill Clipse, owner of Meander Homes Construction Inc., Austintown “You can build all year. It’s just a matter of you have to pick and choose [the days you work].”

Clipse, also president of the Home Builders & Remodelers Association of the Valley, says it’s been “real hard to get cement guys. The weather’s been killing them this year when it rains every third day. But contractors, they’re busy. Siders, roofers, insulators. You’ll see them all in a development. You’re scheduling stuff out a day or a week in advance where before it was just call and they’d be there in the next day or two.”

Which makes the report of the executive officer of the Home Builders Association, Jennie Brewer, all the more remarkable.

“So far in 2014, the first quarter was healthy. We did have an increase already of $2 million over the first quarter in 2013,” she begins. “That’s optimistic. Second quarter seems to be lacking. I don’t have June numbers yet.” Regardless, Brewer anticipates that this month’s numbers will be “healthy.”

Within Mahoning County are 22 new housing starts valued at $5,464,771 in the first quarter, according to numbers provided by the HBA. This compares to 17 housing starts valued at $3,868,140 in the first quarter of 2013.

Clipse, who is building houses in Austintown and Hubbard, expects the number of houses his company builds this year to be where they were before the Great Recession.

“A normal year for me before the housing slump was probably 20 to 30 homes. Last year, we probably hit 10 or 12. This year, we’ll probably be about 20,” Clipse says.

“It has picked up and I’m almost back to a normal-type construction year for my company.”

The upswing in building houses, Brewer says, results from banks being more comfortable about extending mortgages.

“I have noticed that a lot of the area banks are doing marketing for mortgages and that’s a wonderful thing to start seeing. We haven’t seen that in a long time,” she says. “We will start seeing that area become a little more competitive and then hopefully people get out there and feel more confident in buying a new home.”

The numbers in Trumbull County are similar to last year – 11 houses built in the first quarter of this year compared to 10 in the same period of 2013. According to Clipse, Trumbull County is usually slower when it comes to new housing starts than Mahoning County.

“I had one year where I had more in Trumbull, but that’s pretty rare. Generally, Trumbull lags behind Mahoning. For me, I might do five in Trumbull County and 15 in Mahoning County,” he says.

One area in Trumbull County doing well is Hubbard. There Clipse has three houses under construction and three more scheduled to start in the coming weeks. He attributes growth there to Hubbard’s schools and community amenities such as pools and parks.

“This little town is booming,” Clipse says. “As far as Trumbull County goes, this is a boom area.”

The next big challenge, homebuilders say, is the availability of lots that can be developed. Because of government regulations and a lack of financing, it can take upward of two years before houses can be built in new developments.

“If I got a million dollars to put a development in tomorrow, it’s going to be a year-and-a-half to two years before you ever see a house built there by the time you get through the Environmental Protection Agency and get the infrastructure in,” Clipse says. “So next year, Austintown and Boardman, you’re going to be hard pressed to find lots in those communities.”

Those townships are two areas where almost all residential developments are full.

Were he to add more lots to his development in Hubbard, Clipse says, all expenses would come out of his pocket.

“I have a phase [in Hubbard] with 12 lots in it that I could have in in a week. All it needs is paved and curbed and basically I have to finance it myself,” he says. “The banks don’t want to do it. They got tied up in foreclosures and developments going under so they’re very reluctant to finance that stuff.”

Jim DiCiccio, who owns DiCiccio Construction, Canfield, is seeing a change in the ages of those who ask him to build houses. 

“We’ve been building a lot of three-bedroom ranch [houses] for middle-aged, retirees, but yet again we have families here also,” he says. “We are getting a nice mix of all different age groups that works well within a development.”

Along with age of homebuyers skewing younger, the size of the houses is also trending downward, Clipse observes.

“For the last two or three years, people have been selling the big, 3,000-square-foot colonial and they’re downsizing to a 2,000-square-foot ranch with a three-car garage and a sunroom,” he says. “Most of what I’ve built in the last few years have been ranches, not necessarily all retirement people, but your entry-level home buyer.”

Editor's Note: This story first appeared in the MidJune edition of The Business Journal.

Copyright 2014 The Business Journal, Youngstown, Ohio.
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