Valley’s home builders expect market upturn

Housing starts were down 31 percent last year in the Mahoning Valley.

By DON SHILLING

VINDICATOR BUSINESS EDITOR

BOARDMAN — Area home builders have reduced their inventory of unsold homes and are in a better position than builders in many parts of the country, officials said.

The Home Builders/Remodelers Association of Mahoning Valley called a news conference Wednesday to explain how this area differs from the national market.

Housing starts are down significantly in both the local and national markets, but two local builders said that Mahoning Valley builders have fewer unsold homes that were built on speculation, or without having a buyer pre-arranged.

Paul Dieter, HBA president and owner of PMD Builders of Howland, said local builders cut back on “spec” homes in 2006 because they could see supply was getting too high.

By the end of 2007, the supply of unsold homes was down significantly, Dieter said.

A low inventory means builders aren’t carrying a lot of debt to pay back loans for unsold homes, Dieter said. Plus, it means they will be in good position to take advantage of an economic recovery, he said.

Dino Costello, secretary/treasurer of the Ohio Home Builders Association, said the latest projections call for pickup in home building nationally either late this year or early next year.

Dieter said the number of unsold homes locally isn’t available because builders don’t make reports of their inventory.

He added, however, that his company reduced its unsold homes from 28 at the end of 2006 to 19 a year later.

Even though the company cut back on building, its sales rose last year by 40 percent because it was selling homes that had been built in 2006, Dieter said.

Costello, vice president of Mill Creek Companies in Canfield, said that company also cut back on “spec” homes last year. Its unsold inventory fell from 34 to 23 during the same time.

The builders said some “spec” homes always are needed so a builder can market itself to potential buyers. They said the two companies build about 25 percent of the homes in the Mahoning Valley.

The home construction market took quite a hit last year. The number of new single-family homes built in Mahoning, Trumbull and Columbiana counties fell from 670 in 2006 to 460 last year.

Costello said the 31 percent drop has been caused by a decline in consumer confidence. Consumers are concerned about job losses locally and a stock market that has been erratic, he said.

Nationally, home builders are lobbying Congress to pass a tax credit for home buyers, he said. They also are expecting a continuation of low interest rates to eventually draw people back into the home-building market, he said.

shilling@vindy.com