The number of new homes built in Champaign County fell sharply during the Great Recession and demand has remained low.
But local real estate experts said they’re optimistic construction and sales of existing homes will improve this year.
In 2008, 72 permits for new homes were requested, according to records from the Champaign County Building Regulations Department. That plummeted to 27 permits last year.
New homes provide not only construction jobs, but also more demand for raw materials and other goods, said Vincent Squillace, executive vice president of the Ohio Homebuilder’s Association.
Low demand for new homes is a statewide problem, Squillace said. In 2006 and 2007 the state typically saw between 45,000 and 50,000 new home starts each year, but that number has fallen to less than 13,000 in the past two years.
“It just gives you an idea of how much the market has been off,” Squillace said.
But he sees some positive signs for 2013 — average home prices are creeping back up and statewide Ohio is under-built for its population. And as demand for new homes improves, the economy will pick up speed as well, he said.
“We’re not going to get anywhere near six or seven years ago, but I think it’ll start to pick up … Little by little we’re coming back, but no one can signal a turnaround yet,” Squillace said.
Records from the Champaign County engineer’s office for driveway permits also are an indication of how far new home building has fallen in the past decade.
The driveway permits are issued for agricultural, commercial and residential new driveway locations and house numbers, Champaign County Engineer Stephen McCall said. In 2000, the office reviewed 181 driveway permits and 170 permits in 2002. By 2007, however, that figure dropped to 72 permits and then to only 29 permits last year.
Several factors likely contribute to the statewide decline, Squillace said. New home construction depends on several factors, including population, the economy, the number of existing homes on the market and other issues. Information from the U.S. Census Bureau shows Ohio’s population, about 11.5 million, increased only slightly in 2012. Champaign County’s population dipped slightly between 2010 and 2011, from about 40,100 residents to 39,800.
The drop in new homes has meant difficult times for many local construction companies, said Kent Sherry, executive director of the Building Industry Association of Clark County. However, many businesses in the area have made ends meet by doing more remodeling work on existing homes. That type of work has increased steadily over the past few years, Sherry said.
Lending is still tight, but Sherry said because so few homes were built in recent years, demand will be there as long as the economy continues to improve.
“This is a pent up market that just wants to break loose,” Sherry said.
Existing home sales are also starting to increase in Clark and Champaign counties after significant declines a few years ago, said Jerome Vinson, president for the Board of Realtors in Clark and Champaign County.
In Champaign County, more than 450 homes sold in 2005, according to a multiple listing service that covers seven regional counties. That dropped to a low of 272 by 2009, then climbed back up to more than 310 sold last year.
In Clark County, more than 1,560 homes sold in 2005, but then dipped to 1,005 in 2009. About 940 homes sold in Clark County in 2011, which ticked back up to more than 1,120 last year.
The average price of homes sold has also begun to climb.
The average home price in Champaign County was about $113,740 in 2005, which dipped to about $89,660 in 2009. But it rose to more than $104,870 last year.
In 2005, the average Clark County home sold for $100,765, and as little as $88,274 in 2010. But average home values increased slightly to about $93,930 in 2012.
“I feel definitely that the market is picking up,” Vinson said.
While housing values in Ohio still haven’t caught up to national averages, he said, fewer homes are on the market and more home buyers are feeling confident.
“We do lag the national averages at this point but we are seeing a lot of positive action taking place,” Vinson said.
Both Squillace and Sherry said once demand for new homes picks up, the economy will begin to see significant gains, although it could take some time.
“I don’t look for housing to rebound in Clark and Champaign County until probably 2014,” Sherry said.