Condos, Villas Are Hot Among Boomers
YOUNGSTOWN, Ohio – The Ryno Organization, based in Hubbard, is completing construction of the last two condos in the latest phase buildout of the Timber Point Condominiums development there.
As a whole, the development has 12 duplex condos – 24 residences – and 22 villas, says Ryno President Ryan Hallapy, who is also a real estate agent with More Options Realty in Boardman.
Everything in the development is sold out, Hallapy says. Once those condos are finished, that will likely be the last of the buildable land in Hubbard for condos and villas, he says.
“There’s nothing left in Hubbard,” Hallapy says. “Hubbard is literally tapped out for land for new construction for condos and villas.”
The market for condos and villas is hot right now in the Mahoning Valley as homeowners aged 45 to 55 and older look to downsize. Area real estate agents say listings have several offers within days of being listed.
Members of the baby boomer generation, like Marlin Palich, are looking to downsize. With that comes the desire for more freedom, says the general manager of Berkshire Hathaway HomeServices Stouffer Realty.
“We want to downsize out of our big house and then we want to move into that type of living where we can lock the door and go to Florida,” Palich says. “We have a nice place, we still get the benefits of owning a home. But we don’t have to do the upkeep and the maintenance of our yards, our driveways.”
The problem, agents say, is a severe lack of supply to meet the demand.
Indeed, new listings for condos in the northeastern Ohio region are down 13.8% year-to-date, according to the monthly statistics report from MLS Now in February. MLS Now offers statistics from participating brokers operating in an 18-county region that includes Mahoning, Trumbull and Columbiana counties.
In the February report, the region had 641 new listings for condos thus far in 2022, compared to 744 the same time in 2021. Those new listings are a far cry from the 6,457 new listings year-to-date for single family houses.
With inventory that tight, new listings don’t last long, Palich says. Berkshire Hathaway recently listed three condos in the same development in Salem, and all three “went right away,” he says. One listing had three offers within two days of listing. A condo in Columbiana was also sold quickly.
“They sold their big house that had 10 acres,” he says. “Sold that and moved into something that was comfortable, was nice and that they can enjoy and didn’t have to do all that outside maintenance.”
Two of the Salem condos are under contract for $179,900, and the third for $188,000. Those don’t have basements, however. Palich reports that condos with basements, like the one in Columbiana, sell in the $200,000 range and above.
Michael Stevens, owner of Coldwell Banker EvenBay Real Estate, is seeing increased interest among clients coming to his office looking for condos and villas. Older homeowners who are either single, empty-nesters or who seek warmer climates in the winter, want something smaller.
“And their large homes are worth more than they have been for decades,” he says. “There’s a huge demand out there because we need more condos and villas. But the new construction is just getting killed with these lumber costs.”
During a recent visit to Florida, Stevens says he saw a number of condo and villa communities under construction using concrete block instead of lumber, he says.
“I almost feel that maybe regionally, our area may be more impacted because of the material demand compared to construction that’s done in other regions,” Stevens says.
The cost of building supplies is only part of the problem, says Ryno’s Hallapy, who also develops properties in the Saybrook and Stonebridge communities in Canfield. The base price for condos in Timber Point is $271,000, but that’s if construction started today. As material costs fluctuate, so does the final price of the condo, he says.
Once Ryno’s builders get to the framing portion of the build, the sale price for the condo is re-evaluated from the time the buyer signed the contract. If the price increases, the homeowner has to cover the difference.
Lumber is one of the major sticking points right now. Lumber yards only give seven-day notice on costs, he says. By the time construction actually begins, the price can change.
“Right now, it’s at an all-time high,” Hallapy says. “There’s nothing we can do.”
That hasn’t deterred buyers, however. Hallapy says they are willing to pay the costs because of the lack of inventory. They’re also paying cash, he says.
Today’s buyers are looking for ranch-style condos with everything on the main floor, as well as a basement, Hallapy says. Cathedral or vaulted ceilings are popular, as are open floor plans. Ryno primarily builds condos with two full bathrooms and two bedrooms, he says.
Palich’s buyers are paying cash for condos as well. Because there’s still a lack of inventory in single-family houses, sellers are getting top dollar for the homes they’ve lived in for decades.
“Your home is an investment,” he says. “So if you’re selling that bigger home, you can come out and pay $179,000 and be happy, or $180,000 or $200,000, and pay cash for it.”
The added benefit to having more condos for the baby boomers to move into is that the overall inventory of available homes would increase. “If they sell now, where are they going to go to?” Palich asks.
As supply chain issues plague construction, lending is also an issue, he says. Palich understands why lenders are cautious after the last few years as some developers with existing loans went under during the pandemic.
“I know that they would like to. In talking with them, they feel there’s a demand for that,” he says. “We need our lenders to be able to loan and help with those developments.”
While many agents lament the lack of new construction, the cost upfront to do so is deterring builders, despite the high demand.
Ryno is eyeing additional properties in Trumbull and Mahoning counties to build condos and villas, but any solid plans are “probably a year out,” Hallapy says. Just to buy the land and get the proper infrastructure put in – storm lines, sewage, roads – costs at least $1 million up front.
Condo buyers don’t want well water and septic, “so you have to have city utilities,” he says. And the cost to do that has increased 50% in the last year or so, particularly driven by material shortages, higher labor costs and the recent increase in gas prices, he says.
There’s also the issue of finding available land to purchase near city utilities.
“You need at least five acres to do any kind of PUD [planned urban development] association for condos or villas,” he says. “The problem right now is land. There’s nothing left in Trumbull and Mahoning counties. Anything that is left, people want a ridiculous amount of money.
“They want a pretty penny for something that is great.”
EvenBay’s Stevens is in talks with a developer about some raw land in the Valley for a combination of smaller homes and condos for empty-nesters, he says.
“You’re going to see maybe developments that do come up that provide multifaceted housing,” he says. “What may come into play is the cost of new construction.”
Pictured: The final condos at Timber Point are nearing completion – and are already sold. When finished, Hubbard will be “tapped out” for land, says Ryan Hallapy.
Copyright 2023 The Business Journal, Youngstown, Ohio.