Homeownership rates and housing values took a hit during the recession in Ohio and the Dayton region, new Census data show.
But while most of the state’s counties saw a drop in homeownership rates and housing values, industry and government officials say things appear to be on the upswing.
“I think we’ve been through the worst. It’s slowly starting to improve,” said Adam Zengel, sales manager of Zengel Construction and past-president of the Dayton Home Builders Association.
Home building permits have been steadily increasing since 2011 in the seven-county region the association oversees, Executive Director Walt Hibner said. As of September permits for new homes, apartments and condos had increased by 2.5 percent — on track to hit 1,800 by the end of the year but still a far cry from the peak of 5,100 permits in 2004.
Statewide, the average drop in homeownership was 1.6 percentage points for the three-year survey period 2010 through 2012, compared to the three-year period ending in 2009. The Great Recession officially ended in June 2009.
Homeownership in five area counties — Montgomery, Warren, Clark, Darke and Preble — dropped more than 1 percentage point.
The latest estimates from the American Community Survey found that Ohio’s homeownership rates fell to 67.3 percent. That rate was exactly in the middle of the 50 states. The Census Bureau’s homeownership rate does not include vacant or abandoned buildings in its calculations.
Dayton and Springfield officials said the decline in homeownership is bad for cities.
“When you have people that own homes in neighborhoods it makes those neighborhoods stronger,” said Dayton mayor-elect Nan Whaley. “Homeowners invest in the property more than a renter would.”
It’s a “keeping up with the Joneses” phenomena, said Shannon Meadows, Springfield community development director.
“Investing in your home encourages your neighbors to invest in their homes,” she said.
At the same time, Whaley said, a community also needs rentals because they attract young people and new residents. She said rentals provide a way for 20- and 30-somethings to live in the city, especially in an era of tight credit.
“It’s much harder to get that first-time home loan and get into the housing market,” Whaley said.
Tight credit slows sales
Housing experts said the tight credit market bears a good portion of the blame for the decline in homeownership.
“Credit had tightened up so much that people that were wanting to purchase or wanting to sell here just weren’t able to,” said Jerome Vinson, president of the Springfield Board of Realtors. “First-time homebuyers that weren’t able to get loans either went to apartments or stayed at home with their parents.”
Debby Barker of Springboro said when she drives around her neighborhood, “I notice that some house has seven cars all parked in different places. And I say, ‘Their kids came back.’ ”
On Wednesday, Barker’s own daughter, Stefanie Emley, 28, came back, moving from her apartment in Franklin to her parents’ home.
“Due to financial reasons and some medical issues she couldn’t keep the apartment,” Barker said.
Some say that the trend to renting rather than owning may continue, not only because of the recession and slow recovery, but also because so many young adults are burdened with college debt and because declines in home value make houses less of a sure investment.
“We are seeing people being renters by choice,” said Ryan Ernst, spokesman for the Connor Group, a Dayton-based owner of apartment communities.
“I think the percentage of home ownership in this country will be permanently hindered by the events of 2007-2008,” said Dan Bathon, chief executive of Huber Home Rentals and VineBrook Homes Ohio.
The new Census data show West Virginia, Minnesota and Iowa led the country with homeownership rates greater than 72 percent, while the most expensive housing markets in the District of Columbia, New York and California all had rates below 55 percent.
Nationally, the rate declined 1.7 percentage points to reach 64.7 percent.
Locally, only Butler County had an increase in homeownership of more than 1 percentage point. Greene County had a slight increase of 0.2.
“I think one of the things that Butler County has to offer is it is an ideal location for commuters, especially along the I-75 corridor,” said James Karr, president of the Middletown Board of Realtors.
Darke and Clark counties dropped the most in the region, Darke by nearly 6 and Clark by more than 5 points, according to the latest estimates.
The homeownership rate declined by 2.2 percent in both Montgomery and Warren counties, but they were falling from very different levels. Warren’s latest homeownership rate is 77.5 percent, while Montgomery’s is down to 61.6 percent.
The largest Ohio counties all lost ground in homeownership during the recession. Even thriving Franklin County, home to Columbus, dropped by 3.3 percentage points. That decline gave Franklin County the lowest homeownership rate in the state at 54.3 percent.
Housing values down, too
The value of Ohio owner-occupied homes also fell between the two survey periods. Ohio’s median housing value dropped by 4.6 percent, or about $6,300, according to the new data. The nation had a 9 percent decline. Ohio’s decline was approximately in the middle of the 50 states.
Median home value means that half of all homes were worth more and half were worth less. The value is based on the owner’s estimate of what the property would sell for.
Led by Nevada, 11 states saw double-digit decreases in home values, according to the estimates.
All of the nine counties in the Dayton region saw decreases in median home value, ranging from an almost 8 percent decrease for Champaign County to about a 1 percent decrease for Miami County. Montgomery and Warren counties had each had 5.5 percent declines.
Zengel said the recession cut the prices he could charge for a new home, and he said it also deters people from buying new homes because they are waiting to sell their own homes until the value recovers.
Hibner sees plenty of reason for hope. There’s been an uptick in both production and luxury homes. Builders are starting to run into the kinds of problems that pop up when things are going well, such as a shrinking supply of lots that are ready for construction and the lack of skilled labor after workforce downsizing.
“Lots and labor are our two challenges — L-squared,” said Hibner. “We will take that challenge over ‘nobody wants to build a new home’ any day of the week.”