One way to track the pulse of Cincinnati’s real estate market is to look for new construction. Lots of new homes going up is a sure sign of confidence in the local economy. It’s when builders know if they build a “spec home” (a home that is not sold before construction) it will sell in a relatively short time frame. Maronda Homes in Greater Cincinnati and N.KY has 26 market homes available, and we feel that confidence is coming back to the Cincinnati homebuyer.
Builders began work on 26% more single-family homes in May 2012 than the depressed levels of May 2011. The stock of unsold newly built homes is back to 2005 levels. In each of the past four quarters, housing construction has added to economic growth. In the first quarter, it accounted for 0.4 percentage points of the meager 1.9% growth rate.
It’s hard to predict whether the sales numbers for newly built homes in 2012 will exceed 2011- but with 676 new homes currently listed in the MLS, I think we have a good chance to stop the decline and maybe even gain a few sales over last year.
From here on, housing is unlikely to drag the U.S. economy down further. It will instead reflect the strength or weakness of the overall economy: The more jobs, the more confident Americans are about keeping their jobs, the more they are willing to buy houses. “Manufacturing had led growth and construction had lagged,” JPMorgan Chase economists said last week.”Now the roles are reversed: Manufacturing growth has slowed as private construction comes to life.”