Housing Starts Up in Valley, Builders Say

YOUNGSTOWN, Ohio — New housing starts in the area are ahead of the pace last year, but there are clouds on the horizon that could dampen the spirits of builders enjoying some of their busiest seasons since the Great Recession.

“In the last couple of years, there’s been an uptick,” says Steve DeLucia, owner of DeLucia Construction, Canfield. “Last year was probably our busiest in five years as far as what we started and even conversations with people.”

So far this year, the company has started work on three houses with another four scheduled to begin later this year.

It’s a similar situation at Sam Pitzulo Homes & Remodeling, where owner Sam Pitzulo reports five houses under construction with three more in the pipeline.

“This is ahead of schedule for us. We try to keep it around 10 [new houses] every year, so this has been a very good year for us,” he says.

Across Mahoning and Trumbull counties, first-quarter housing starts are ahead of the pace, according to the quarterly housing start report from the Home Builders and Remodelers of the Mahoning Valley, with 29 in Mahoning County, up nine from 2017, and 15 in Trumbull County, one more than a year ago.

While the report doesn’t include specific figures for Trumbull County municipalities, Canfield Township led Mahoning County in the first quarter with seven residential construction starts, followed by Austintown with six and Springfield Township with four.

In requests from area zoning departments, Boardman reported five permits have been approved, all since April 18, and in Howland, four have been approved this year.

“Most of ours are in the Canfield area. If we build six homes, three would be in Canfield and then sporadically throughout the area,” DeLucia says. “It’s near Boardman with all the commercial shops. It’s got good schools. And the developments are there. You can only build where there’s land available and there’s more land available in Canfield.”

While figures from last year for both counties were down from 2016, they were still among the best in the past decade. Last year in Mahoning County, there were 134 starts valued at $30,424,495 and 63 starts in Trumbull County valued at $10,546,320. 2016 saw 142 and 100 starts in Mahoning and Trumbull counties, respectively, the highest since 2009.

“Any builder you talk to now is close to maxing out. We’re all in the same boat. No one should be complaining today,” Pitzulo says. “We’re all keeping our workforce going and I don’t know that anyone could double up [on what they’re doing].”

Among the concerns the builders face are a workforce shortage – “That will keep us from reaching those [pre-recession] quotas,” Pitzulo says – and the rising cost of building materials, primarily lumber.

In November, President Donald Trump effected a 21% tariff on lumber imports from Canada, which accounts for roughly a quarter of the lumber used by home builders in the United States. Since the tariffs went into effect, the price of lumber has risen 32%, according to the Washington Post. The National Association of Home Builders initially projected the tariffs to raise the price of “typical new homes” by $7,000.

“Just the mere mention of tariffs, it feels like it’s given suppliers a green card to go ahead and raise prices. They’re preparing us for what’s going to come, they say, to soften the blow,” DeLucia says. “It’ll be a negotiation [between the United States and Canada] … but even if it ends up that there’s no tariffs, those prices aren’t coming down.”

Pitzulo says he believes the tariff rate will eventually drop and that, in the long term, the industry will stay in good shape.

“The building industry, like all others, is going to boom for a couple years. Everything looks rosy,” he says. “Interest rates are intact. Some people are thinking 4.5% is too much, but my dad built his home in 1965 at 5.5%. We’re in great shape with interest rates. If you look back to the ‘70s and ‘80s, these are incredible rates.”

DeLucia is also keeping an eye on rates and consumer confidence reports, which are at 17-year highs, according to The Conference Board, which produces the monthly survey.

“Prices are only going to go up and interest rates are still at historic lows. As long as the economy keeps thriving, material costs are going to go up,” he says. “The time to build is now.”

Copyright 2022 The Business Journal, Youngstown, Ohio.