Nixa builder Sam Clifton had more opportunity to flex his woodworking talents in recent months as the home building market continues its upward trend in the Springfield area.
After an eight-month hiatus, the Springfield metropolitan statistical area in December returned to the National Association of Home Builders/First American Improving Markets Index – which tallies housing markets showing measurable improvement – and sustained that growth, remaining on the January list.
“The market is definitely coming back,” said Clifton, the owner of Millstone Custom Homes LLC. “I think all the repossessions and foreclosures are finally starting to fall off the market and people are looking to build new again. That’s where I come in.”
Millstone completed five homes in 2012 with an estimated market value of $2.6 million, according to Springfield Business Journal research.
Currently working on six custom-home projects, Clifton said his company has bid numerous projects in recent weeks, an uptick he’s glad to see in the construction market.
“There were lots of people out there who lost their jobs, not because they were bad builders, but because they had bad timing,” he said.
“The recession was a big adjustment for our industry and now that things are starting to move forward, we’re going to need those people back in the workforce, back out there building.”
List watchOriginally debuting on the Improving Markets Index in March, the Springfield MSA – which comprises Greene, Christian, Webster, Dallas and Polk counties – was among the 84 new additions in December, extending the list to 201 MSAs, a record at the time for the IMI.
However, in the latest sign of a burgeoning recovery in U.S. housing markets, the number of metropolitan areas on the list rose for a fifth consecutive month to 242 in January, including entrants from 48 states and the District of Columbia.
The index is measured based on employment growth data from the U.S. Bureau of Labor Statistics, housing price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. To be listed, an MSA must show improvement from its respective lows in all three areas for at least six consecutive months.
“This is a nationwide upswing, not just locally,” said Matt Bailey, board president of the Home Builders Association of Greater Springfield and owner of construction company Bailey Co. “I think a lot of it has to do with the market and people’s fears. Right now, jobs seem to be on a steady climb and everyone’s fear is starting to subside.”
In the Springfield MSA, the employment low was Sept. 30, 2009; the housing price low occurred Jan. 31, 2011; and the building permit low was notched March 31, 2009. Since, Springfield has shown a 5.1 percent boost in unemployment, 4.5 percent increase in single-family housing permits and a 3.6 increase in home prices, according to the NHBA.
“We created the improving markets list in September 2011 to spotlight individual metros where – contrary to the national headlines – housing markets were on the mend,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla., in a news release. “Today, 242 out of 361 metros nationwide appear on that list, including representatives from almost every state in the country. The story is no longer about exceptions to the rule, but about the growing breadth of the housing recovery.”
According to the Jan. 4 employment report by the U.S. Labor Department, the nation’s construction industry gained 30,000 jobs in December, the fastest pace of construction employment growth since February 2011. According to national trade association, Associated Builders and Contractors Inc., the construction unemployment rate for December was 13.5 percent – not seasonally adjusted– up from 12.2 percent in November, but down from 16 percent the same time last year. The ABC reported construction employment rose slightly, by 18,000 jobs, or 0.3 percent in 2012.
Sustainable growth?Eight MSAs were dropped from the December indexand six more slid off in January, a fate Bailey said could again be in store for the Queen City.
“The growth in Springfield is a slow and steady recovery mode and that sometimes means dips,” he said. “We could be on one month and drop of the next, that is just the nature of the beast.”
Bailey describes Springfield’s growth as “bowl shaped,” saying the MSA was slower on the decline and conversely, will be slower on the rise as well.
“We are insulated, but we still got hurt,” he said. “That’s just not the kind of thing you bounce back from right away. We might only see one new permit a month, but that’s still growth.”
The key, Bailey said, is consumer perception.
“I can see the positive attitude on every consumer I deal with lately and the supply houses are telling me they are having record months,” he said. “They know people are building and things are getting better. Confidence is key.”
