Builders Look to Fill Demand for New Houses
YOUNGSTOWN, Ohio — Following some delays caused by the coronavirus pandemic, area homebuilders are busy attempting to address the inventory shortage in the Mahoning Valley real estate market.
Housing starts are up in both Mahoning and Trumbull counties compared to a year ago, according to data provided by the Home Builders and Remodelers Association of the Valley. During the first three months of this year, Mahoning County reported 29 housing starts, compared to 23 during the same quarter last year. In Trumbull County, 14 starts were recorded during the first quarter, up from four a year earlier.
“Starts were very promising for the first quarter, given the economic issues we’re in,” says Jennie Brewer, executive officer of Home Builders & Remodelers Association of the Valley. “We’re anticipating great numbers for 2020.”
Last year, 135 houses were started in Mahoning County and 76 in Trumbull County, according to HBA data. Leading the Mahoning County numbers are five starts each in Milton and Springfield townships.
Residential construction has remained strong throughout the coronavirus pandemic, Brewer says.
Residential construction was considered an essential industry in Ohio, enabling members to continue to work on projects as long as they followed safety protocols.
Permit records in the two counties confirm a pace either at or higher than last year. Through April 30, 40 permits for new houses were issued in Mahoning County, the same as during the first four months of last year. In Trumbull County, 33 new permits were issued through mid-May, up from 20 during the same period in 2019.
“All of our guys, from what I’ve heard, are busy,” Brewer says. Some encountered hiccups in getting needed materials from suppliers and had to make alternative arrangements, but most are “back up to speed now,” she says, and builders are busier than ever.
Two of the permits issued for single-family units in Trumbull County so far this year were in Howland Township, up from one during the same period last year, reports Kim Mascarella, township planning director. Each of the houses permitted this year is valued at $538,400. In 2019, eight units were permitted.
“The township is in final review phase for two residential projects,” she says. Phase one of the Villas at Spring Run involves 11 new single-family houses. The other project in final review, Misty Woods condominiums, involves three single-family villas and eight two-family townhouses.
“We haven’t paused our plan for the project at all based on the pandemic,” says Matt Bellin, developer of the Villas at Spring Run. Ground has yet to be broken on the project’s infrastructure, but he plans to have the units available for sale in the first quarter of 2021.
All of the units are being built on spec, he says. While the market turned cold in March and April, interest has returned to “pre-COVID levels,” he says.
“It’s actually a pretty exciting time,” affirms Charles Zidian, a partner in Pine Lake Development LLC.
Within the next two months, the developer will be getting underway on Pine Lake Reserve in North Lima, where the company will be building single-family and quad villas, he reports.
Pine Lake Development bought the property in January and activity was “gangbusters” for about a month, until work began to be put on hold. “To be quite honest, we’re about 60 to 75 days behind schedule,” he says.
“We have three lots that are sold and those are all going to be built to suit,” Zidian says. One of the four quad units has been sold and there has been substantial interest in the remaining three, “so I anticipate those going quickly,” he says. Two lakefront sites are presold and the owners are submitting their plans.
“New construction is doing much better,” affirms Sam Pitzulo, president and CEO of Sam Pitzulo Homes & Remodeling in Canfield. The company builds 10 new houses per year and construction has begun on eight, all of which are already sold, he says.
The company began doing remote sales during the pandemic. “Our new construction actually has kind of picked up. We didn’t anticipate being where we are,” he says.
Pitzulo points to a couple of factors influencing the market. One is interest rates, which are extremely low now. The other is the price of lumber, which has dropped by about 50%, he says. Those are the two biggest costs for a new house.
“Those two are low and I’ve got to attribute that to why building has picked up,” he says.
“We’re extremely busy. We’re building all over the tri-county area,” reports John Sudon, co-owner and resident architect for Sudon Brothers Inc. in Girard. Most of the projects are between 1,800 and 3,500 square feet, although one is more than 10,000 square feet, he says.
Business slowed down toward the end of February, then people reached out as sectors of the economy began to reopen.
All of the houses Sudon‘s company is building are presold. “Unfortunately, the market has not come back for spec homes,” he says.
Mark Ramunno’s company, Custom Designed Homes by Mark Ramunno in Canfield, has seven new builds under contract, including two awaiting approval for financing, in Poland, Springfield, North Lima, Beaver Township, Columbiana and Berlin Center.
“We’ve been pretty busy,” he says. “Most of my customers were already in place prior to all of this.” Other than delays in getting materials and getting workers on site, the pandemic had little effect, he says. Building costs have risen and labor is up “tremendously compared to what it used to be,”’ he says. “There’s a bit of a shortage for labor so we’re paying a bit of a premium.”
The average price point for a house, which has been on the rise in recent years, is about $500,000.
People are going to look to spend more time at home, he says. Home offices have been on the rise over the past five years and are “going to be a mandatory piece of the puzzle,” he says. “The other big thing is everybody wants a backyard porch attached to the house so they can spend evenings in their own back yard.”
Mayo Realtors in Boardman is involved in three new construction projects in Mahoning County, says broker and owner John McCarthy. Mayo has partnered with GreenHeart Companies’ construction arm to represent the builder in two villa condo communities in Poland and a residential area off Western Reserve Road in Boardman. Representing new construction has accounted for about a quarter of Mayo’s business, he says.
GreenHeart dug three new basements during one recent week for an anticipated late August completion on the units, McCarthy says. He acknowledges the pandemic has affected the construction supply line, extending build times.
“There’s definitely a lack of inventory,” he continues. “As builders ramp up the new build process, they’re finding a very active market. A lot of baby boomers are anxious to build a house that’s for aging in place.”
The Courtyards at Stonegate is breaking ground in June on four ranch-style condominiums in Poland.
“We are looking at a completion around fall,” says Jason Burnette, sales director. Two of the four units are sold and, in addition to marketing the remaining two, Marblewood is taking reservations for another quad that will begin construction later this year or in 2021.
Prices begin at $239,900 for the 1,965-square-foot units, which feature two bedrooms, 2 1/2 bathrooms, a sunroom, island kitchens and oversized garages.
What people look for hasn’t changed because of the pandemic, Burnette says, but what has changed is how the properties are marketed, with the bulk of marketing going into digital services. “Fear kept people away because they were extremely leery about being able to go into homes,” he says.
With on-site traffic having gone down because of the pandemic, interest was strong for an in-person open house in May for one of the sites.
“Folks are looking at it. The phone is ringing and we are getting calls,” Burnette says.
Pictured at top: Construction at the Poland Preserve. Photo from Mayo Realtors.
Copyright 2020 The Business Journal, Youngstown, Ohio.