Matt Heinze, owner of Matt Heinze Drywall LLC of Neapolis, Ohio, left, and worker Aaron Heminger tape and mud drywall in a house under construction in the Brookhaven subdivision in Perrysburg Township. More than 60 lots have been added to the Perrysburg area in the last 12 months.
Having endured one of the bleakest winters in Toledo area history, the area’s home building industry is now seeing signs of a spring full of hope.
Local home builders say since the snow and cold’s departure, buyers of new homes are popping up in strong numbers that could lead to the best year of sales since the 2007 recession.
For some, business has rebounded enough to allow the building of “spec” homes — houses built on a speculative basis without a confirmed buyer.
Another encouraging sign: Several new housing plats have opened in existing subdivisions, a response to greater customer demand for vacant lots.
“I think everybody’s glad that January and February have moved on. Hopefully we’re going to start seeing some warmer weather and, in turn, we’re going to see a lot of [home foundation] digs going on in April,” said Chuck Barchick, owner of Barchick Custom Homes Inc. of Toledo, and the current president of the Home Builders Association of Greater Toledo Inc.
Mr. Barchick said he had been doing more remodeling work than home-building during the last two years, but last month his firm began building two homes for clients.
“It’s been difficult, but I think it is going back to normal,” said Mr. Barchick, who added that he was greatly encouraged by 18 requests for information on his homes during February’s House & Home Show at the SeaGate Centre downtown.
Aaron Sloan, co-owner of Saba Custom Homes Inc. in Sylvania Township, said he had a good year in 2013 because he built 60 homes. But this year, he said, he’s on pace to build 75 homes, weather permitting.
“Ideally, if we do 75, that’s a 25 percent increase, which is pretty good,” Mr. Sloan said. “The big question is: Can we meet demand? And I would say if we don’t, it’s because of the weather.”
Mr. Sloan said his business, unlike some others, experienced a strong turnaround in 2013. But 2014 appears to be a year when all boats will rise with the tide.
“I would definitely agree that, with the weather sort of broken finally, activity has certainly picked up. In the last two weeks, I have sold eight houses,” Mr. Sloan said. “It’s been a while since I sold eight houses in that amount of time.”
Workers with Gleckler Brothers Inc. of Metamora, Ohio, prepare the grade of a home so concrete can be poured in the Wingate Meadows subdivision in Springfield Township. With a break in the weather, area construction firms say demand is also springing up.
Mike Neal, an economist with the National Association of Home Builders in Washington, said it probably does feel as if a true turnaround is in progress for local builders because the Toledo area home building industry was hurt deeply in the recent recession and still lags most of the country in a recovery, according to the NAHB/First American Leading Markets Index.
According to the March readings of the index — which measures housing permit activity, home prices, and employment compared to a historical norm — the United States as a whole is at 87 percent of its historical norm, but metro Toledo is at just 70 percent.
Some areas already have rebounded fully, but “Toledo is in the industrial Midwest and the recession just hammered that area of the country,” Mr. Neal said. “Because [Toledo] fell so far it has a long way to go to get back to normal.”
In housing permits, Toledo is at 33 percent of normal, based on the period from 2000 to 2003. The United States as a whole is at 44 percent.
In housing prices, Toledo is 83 percent of normal for the period from 2000 to 2003, while the United States as a whole is at 123 percent.
Employment, however, may explain why Toledo area builders are feeling optimistic. Toledo is at 95 percent of its 2007 baseline, the same as the United States, according to data.
Mr. Sloan of Saba Custom Homes said last year he had a number of customers who were looking at buying a home but were nervous about their jobs and employment.
“But now they’re coming back and feeling more confident and they’re buying,” Mr. Saba said.
Mike White of Buckeye Real Estate Group in Sylvania Township said new-home buyers are telling him that they are having an easier time selling their existing homes, which is driving much of the home-building activity.
“Also, there’s very little appraisal issues or bank-financing issues and that has made the process much smoother for our customers,” said Mr. White, who said he has 22 homes under construction, including four “spec” homes.
“I’m looking forward to a very strong 2014 with the amount of activity I’ve received and showings I’ve had — even with several feet of snow on the ground it was very promising,” Mr. White said. “In 2013, I completed 25 homes. I hope to do 40 to 50 homes this year.”
Mr. White said his business has picked up to the point where he has added a few workers to his permanent building crew.
“It feels great to able to hire a few more people in my operation. This sure beats what it was four or five years ago. It’s great to be on the other side of it,” Mr. White said.
Increasing numbers of new-home buyers during the last 12 months has sparked a scramble to develop new lots.
Several major subdivisions have opened or are in the final stages of opening new plats.
During the last 12 months, Mallard Pointe in Sylvania Township added 52 lots; Winterbourne Station in Monclova Township has added 29 lots; Oak Creek in Sylvania Township added 14 lots; Crimson Hollow in Monclova Township added 36 lots; the Village at Wingate Meadows in Springfield Township added 39 lots; Maple Creek in Sylvania Township added 12 lots; Northwoods in Sylvania Township added 18 lots; Plum Grove in Springfield Township added 12 lots; the Sanctuary in Perrysburg added 13 lots; Riverbend in Middleton Township is adding 26 lots; Brookhaven in Perrysburg added 30 lots; Woodmont in Perrysburg Township added four lots; Saddlebrook in Middleton Township added 12 lots, and Emerald Lakes in Perrysburg Township added 19 lots.
Dan Bollin, who is the head of Eagle Creek Builders, which developed both Wingate Meadows and Plum Grove, said “the banks are very skittish still for making loans for subdivisions.”
But with the housing industry “drastically improved” from a year ago, Mr. Bollin said, there is money to lend to add plats.
“It’s a lot better than it was,” said Mr. Bollin. He said he began building four “spec” homes last year in order to have them ready for this spring, but three of the four have been purchased already.
Sam Etue, left, and Tim Pinkelman prepare ground for concrete as they and other employees from Gleckler Brothers Inc. of Metamora, Ohio, work on a home site in the Wingate Meadows subdivision in Springfield Township.
“We went through a long, hard, dry spell,” Mr. Bollin said. “But most people coming to us have to sell their houses, and now they’re putting them up for sale and selling them within a few months.”
The local optimism even has led to limited activity to develop new subdivisions.
Mr. Sloan and his partner, Blair Saba, are about to open Hawthorne, a 241-home subdivision in Perrysburg that will have 30 lots in its first plat.
“We’ll be going into Hawthorne with a handful of presales. We think it will be a pretty hot subdivision,” Mr. Sloan said.
And in Michigan’s Bedford Township, Dennis Kolar, who is the chief building inspector, said he has met with three developers who want to start subdivisions in the township.
“In talking to the builders here, it sounds like this year is going to be even better than last year,” Mr. Kolar said.
Last year, 66 new homes were built in Bedford Township, which is a 35 percent jump over 2012.
Builder Josh Doyle of Homes by Josh Doyle LLC of Whitehouse is working with a Chicago developer, Roger Householder, to develop Brickerville Commons, a 91-lot subdivision in Monclova Township.
“This year has been exciting to see,” Mr. Doyle said. “There’s a lot of activity in the industry, and there’s a lot of people coming out.”
Mr. Doyle said he built 56 homes last year and is looking at constructing 63 this year.
Mr. Doyle said he is committed to starting two new houses per week through June. But he said concerns remain.
Mr. Doyle said he’s excited about all the plats that have been added in the last 12 months, but there are too few new subdivisions under development. The reason for that, he said, is that the price of developing land without nearby infrastructure has skyrocketed.
Land prices and the cost of materials such as asphalt have doubled, and township concerns over rapid growth have led to higher development fees, Mr. Doyle said.
“It’s become easier to expand an existing subdivision than it is to start a new one,” Mr. Doyle added.
The new plats have helped, but many of these subdivisions are close to being built out.
“I’d say now we probably have about five years’ of available lots,” Mr. Doyle said. “It’ll be interesting to see what happens from here when these lots run out.”
Contact Jon Chavez at: email@example.com or 419-724-6128.