Valley Home Construction Skyrockets Despite the Rising Costs

YOUNGSTOWN, Ohio – From the driveway of a house his company is building at Firestone Farms, it’s easy for Mike Savko to point out just how big of a boom in residential construction Columbiana is seeing.

With loaded pickup trucks kicking up dust and the sounds of hammers and saws all around, the owner of Savko Home Builders, Columbiana, can see nearly a dozen other houses under construction.

Through this stretch of Homestead Drive, on the northern end of Firestone Farms, are signs in soon-to-be front yards advertising the builders, a who’s who of contractors: Savko, Sam Pitzulo Homes & Remodeling, Jon Oliver Construction, Sudon Brothers Inc., Mark Ramunno Builders, DeLucia Builders and Selah Homes.

“Those two [houses] down there and that one over there with the black truck in the driveway are the only ones that have been here more than a couple years. This part was pretty empty,” Savko says, pointing around the neighborhood. Several lots away are two big houses with manicured lawns and “welcome” signs hanging next to the front doors, a stark contrast to the mud and dust of the active construction sites.

Homestead Drive at Firestone Farms is a hotbed of construction activity, with several homes nearing completion and plenty more foundations underway.

None of the structures are move-in ready but some are closer to completion than others. While Savko’s project is basically just studs, wooden floors and a roof, another house a few doors away had a painter touching up the moulding.

One of the houses – currently just a foundation – is slated to be valued at more than a million dollars when all is said and done, Savko says the builder has told him. The house where Savko is standing, dubbed “Project H1,” is valued at $449,000, according to the city’s permit. In this neighborhood, that price tag isn’t out of line.

“All this work now is because of the abatement,” he says, referring to Columbiana’s 15-year property tax abatement on new construction, which went into effect in 2019. “Now it’s to the point where [Firestone Farms] is thinking about adding some more roads because they’re running out of lots.”

That abatement has made Columbiana one of the hottest construction markets in the area. But it’s not alone. Across the Mahoning Valley, new-house construction is keeping contractors busy, even as supply prices soar. For now, at least, customers are willing to put up with the ever-increasing cost of building a house.

“Nothing’s scared them yet. When you tell them, ‘Lumber’s gone up 10% since we priced this out,’ or that something’s not available until July or August, rarely has anyone given us a hard time. From that standpoint, it’s been great,” says Joe Koch Jr., superintendent of Koch Construction in Austintown.

In Austintown, Koch Construction is nearing the start of its newest development, The Landings at Boulder Creek, says Joe Koch Jr. Phase One will have 15 lots.

Koch Construction’s schedule is full up. Plans are to begin one house every week through July, Koch says, although his team is looking to soon boost that to two per week to keep up with demand. Still, the price of construction is an ever-present thought.

“People have the expectation that the price will be the same when we sign the contract to start building,“ he says. “We try to honor that and we take it on the chin for some of those. We can’t do it forever, though.”

Just about everything involved with building has gotten more expensive. Lumber prices have risen more than 60% this year alone and as of May 5 they were at $1,635 per 1,000 board feet, up from $343 on May 4, 2020, according to

The National Association of Home Builders estimates the increase on lumber alone has driven the average price to build a new house up nearly $36,000. Savko estimates that for the houses he builds – between 2,100 and 2,600 square feet – prices are up about $20,000 from a year ago.

“Prices started to level off in February. But they started going right back up. Canada, where we get a lot of our lumber from, is facing its own shortage. So we’re not even getting as much supply,” says Karen Caruso, executive director of the Home Builders & Remodelers Association of the Valley. “There’s frustration over all of it. Builders are worried because they’re busy and the cost of supplies is so high. They’re trying to estimate jobs six to eight months out. How do you make any sort of estimation of prices at this point?” she asks.

An HBA member who installs garage doors says his prices have jumped 30%, she says. The rising price of copper has added a few hundred dollars to the cost of putting in wiring, Savko says; CNBC reported April 30 that copper prices were at a record high and up 27% since the year began. A key ingredient in drywall, gypsum, is up 7% year-over-year. Even steel is on the rise – 17% from a year ago – pushing up the price of everything from water heaters to wiring.

This year alone, says Sam Boak, insulation and shingles have seen several price increases of about 8% each. The net price of each, says the owner of Boak & Sons Inc. in Austintown, is up between 15% and 18% year-to-date. After temporarily shutting down at the onset of the pandemic, Boak & Sons brought all 180 of its employees back last summer, but has “never been able to catch up” with demand, adding an extra challenge to the problem.

“It’s a perfect storm right now,” Boak says. “In the past, we’ve dealt with supply problems and we’ve dealt with price problems. It’s never been both of them like it is right now.”

Boak & Sons owner Sam Boak says the cost of shingles and insulation are each up about 15% since the start of the year. ‘It’s a perfect storm,’ he says.

For builders and contractors, one question at the back of their minds is how much of the price increase is legitimately a result of supply and how much is just following the larger economic trends.

“In conversations with our suppliers, they say it’s part demand, a little bit of inflation and then they just shake their head. When I ask if it’s because they can, they smile,” Boak says. “It’s like they’re saying, ‘If lumber can do it, why can’t we?’”

Adds Koch: “Everybody’s a parrot. Once one starts, they all start chirping. What kills us is the lead time. Every day past 120, you’re accruing hundreds of dollars in interest. Multiply that by 15 lots and we’re taking a big hit,” he says about Koch Construction’s newest development, The Landings at Boulder Creek in Austintown. Site preparation is underway there and he hopes to begin to put down foundations in June.

Windows that once took one or two weeks to arrive are now taking 12, Koch says. Savko adds that some of the vinyl window products he usually buys aren’t available this year as manufacturers retool factories to keep up with demand.

Boak says he’s ordering roofing products that he’ll need two months down the road, a challenging task when some of the projects where the supplies will be used aren’t even lined up yet.

“The problem with that is what the builders need. Each home is going to have its own size and style and needs,” he says.

The availability of workers can also contribute to delays. While Koch and Savko say their companies are decently situated in terms of labor, how busy subcontractors are remains a limiting factor.

“We’re keeping all our subs busy but we’re not the only builder they’re working with. Scheduling some contractors, we have to give them three or four weeks [notice] when in the past it may have been a week or two. We end up having some downtime where nothing’s going on at a home,” Savko says. “When everybody’s busy, it’s not like there’s magically more contractors and bigger crew sizes.”

At some point, all agree, the squeeze will stop. The price increases can’t go on forever. Even though Koch and Savko say most of their customers have been willing to put up with the increases, the line will be drawn somewhere.

“It’s got to come to an end somehow. You can only pass that cost along to so many people,” the HBA’s Caruso says. “There’s a point where it has to crash. I hate to say it, but it could happen.”

Even with low interest rates, to which the builders attribute some of the construction surge, there may come a point when the savings don’t cover the price increase on building materials. But for now, the building boom is continuing.

“In new business, we’ve had people say they’re going to wait as they try to get a feel for what they can afford,” Savko says. “They may be holding off and waiting for things to subside. But others are totally aware and if prices keep going up, they understand that there may be a change-order cost involved.”

Adds Koch, “Throughout this pandemic, people have put a lot of things into perspective and those who may have been on the fence prior to the pandemic about building or remodeling have re-evaluated things and decided to pull the trigger. I hope that continues and the good times roll for another 25 years. But I know those things can be fleeting. I have optimism that people are going to do whatever they can to keep this whole thing going.”

Pictured at top: Mike Savko, owner of Savko Home Builders, has four projects at Firestone Farms.