Greater Cincinnati new home market improves

CINCINNATI -      Smiles were evident Monday on the faces of many members of the Greater Cincinnati home building industry.

 

     They appeared because there were new indications the economy is showing signs of improvement, which could set up a domino effect on consumer spending.

 

     The good news was that the National Association of Home Builders named the Tri-State to its Improving Market Index (IMI) of housing markets showing measurable gains.

 

     “I believe we’ve bottomed out,” said Carolyn Rolfes, President of the Home Builders Association of Greater Cincinnati and Potterhill Homes.  “I believe we’ve been bouncing along the bottom for a little while and I believe 2012 is going to see an improvement in the number of housing starts as well as the home values.”

 

     Brian Miller, Executive Director of the Home Builders Association of Northern Kentucky, said the local housing industry is excited and cautiously optimistic about the future of the region’s housing.

 

     “The market is beginning to pick up and that is a welcomed sign,” he said.  “We are seeing housing permits increase on a year over year basis without the support of tax credits for the first time since the recession began.”

 

     The IMI measures three sets of independent monthly data to determine its rankings:

 

     --Bureau of Labor Statistics – employment growth

     --Freddie Mac – house price appreciation

     --U.S. Census Bureau – single-family housing permit growth

 

     Dan Dressman, Executive Director of the Home Builders Association of Greater Cincinnati, said he was delighted at the news.

 

     “Consumer confidence is a huge factor in new home construction, which continues to be burdened by overly restrictive lending policies and an unhealthy inventory of distressed properties,” he said.  “Improvement on both of these fronts will lead to a sustained recovery.”

 

     Cincinnati is one of only two Ohio communities to make the national list.  Toledo is the other.   

 

     Rolfes said many buyers who have been on the fence about purchasing a new home now appear to be getting back in the game.

 

     “We’ve seen an uptick – especially in higher price points – of people actually coming off the sidelines and paying cash,” she said.

 

     According to Rolfest, the best sellers appear to be in the price range of $250,000 to $500,000 and above $700,000.

 

     That’s one reason the 2012 Home-A-Rama in Clermont County’s Miami Township has homes with prices between $700,000 and $1 million.

 

     Tim Burgoyne of Hal Homes, one of the Home-A-Rama sponsors, echoed Dressman’s comment about consumers regaining confidence in the housing market.

 

     “You can sell your home now.  You can get a good deal on a new home.  You can get good financing rates right now,” he said.  “It’s a good time as it has ever been to buy a new home.”

 

     Before the housing market collapsed in 2007-2008, many builders had an extensive inventory of market homes, which were built on speculation.

 

     Burgoyne said those days are gone.

 

     “We are completely out of market homes,” he said.  “If you want to build with us now, it has to be a pre-sold home that we build for you individually.”

 

     If the current trends continue, the region’s economy would get a significant boost because Rolfes said every new home sold creates three new permanent jobs.

 

     Pella Windows and Doors plans to add a few workers this year to keep up with increased demand, according to General Manager Fred Cernetisch.

 

     “We’re seeing a lot more blueprints,” he said at the firm’s Montgomery showroom.  “We’re talking to builders that haven’t necessarily built a house in a couple of years.”

 

     The company’s employment peaked around 100 people before the housing market collapsed.  Now, it’s down to the upper 50’s.

 

     Cernetisch said sales grew by double digits in 2011 and he’s looking for gains in the range of 10-15 percent for 2012.

 

     The same pattern is emerging at Ferguson Bath, Kitchen & Lighting Gallery in Sharonville.

 

     Traffic is up.

 

     “We have more consultation appointments being made for us,” said Showroom Consultant Kelly Weidner.  “That leads us to believe there are more new homes being built.  Those customers are coming in to make all their selections.”

 

     The extra business has meant more hiring.

     “We’ve actually added several part-time employees to help us with the walk-in traffic that we’re experiencing,” Weidner added.