Move-Up Market Is Bright Spot For Area Home Builders

CINCINNATI - The home building industry is still sluggish, but there are some segments that are showing signs of significant improvement.

One is the the market for move-up buyers -- people who've outgrown their current home or want to live in something with up-to-date features.

John Henry Homes is among companies taking advantage of the trend.

Some might have thought co-owners Josh Blatt and his brother, John, were gambling last fall when they bought 14 lots in the Trails of Four Bridges in Liberty Township.

Josh Blatt said he sees the move as an opportunity to serve a niche market.

"If anything, there's a housing shortage right now," he said. "The feedback we're getting from the people that we're talking to is that there's not good inventory. There's a lot of houses on the market, but it's not good product. They're older houses. They're out of date. They're in bad condition."

Blatt said people want a good location, energy efficiency and don't care to be hassled with repairs for air conditioning, roofing and other maintenance items for an older house.

"You hear a lot of talk about people who can't sell their house, but people with good houses and if they're priced right, they do sell," he added.

Prices at Trails of Four Bridges range from $275,000 to $350,000, which Blatt says is affordable with low interest rates. Four of the homes have already been sold.

The Drees Company is seeing similar trends in the dozen markets it serves across the country, according to Vice-President Rex Gordon.

"A lot of times they say the first-time home buyer has been squeezed out due to financing, but the move-up buyer is still there -- still looking for a new home -- looking for the things that are in a new home that are not in a resale today," said Gordon.

Gordon said the average price for a move-up buyer has fallen in the past few years, making the values of new homes much better.

"It probably ranges from $275,000 to $400,000 today where it used to be $325,000 to $450,000," he added.

Dan Dressman, Executive Director of the Home Builders Association of Greater Cincinnati, said the price of lots for houses have fallen as well.

"They have been reduced, obviously, because there's been a surplus of developed lots already on the ground," he said. "So, builders are going in, buying them and they can actually build a home for a lot less money because they're not paying as much for the purchase of the lot."

Dressman said the home building industry is still bumping along the bottom, but is seeing some pockets of improvements like the move-up category.