The Home Builders Association of Greater Springfield is hoping to get a better handle on the state of the Springfield-area real estate market, and the organization is getting some help from a national expert on market research.
St. Louis-based Zanola Co. LLC presented the first batch of its market research about the five-county area - Greene, Christian, Taney, Stone and Barry counties - to a group of HBA members and financial community representatives Oct. 30.
The meeting of HBA and Zanola was serendipitous for both sides, according to HBA Public Affairs Director Jennifer McClure. She said that members of Zanola's staff saw a Springfield Business Journal article by HBA Executive Officer Matt Morrow, in which he talked about HBA's desire to gather more in-depth information about the housing market.
"Zanola contacted Matt and told him that not only were they working on a similar project for five counties in the region, they were also drilling much further into the housing landscape," McClure said.
The presentation
Zanola presented an overview of the housing market based on information from public records and field investigation, using tools from Tennessee-based MarketGraphics Research Group Inc., which specializes in gathering data for the residential real estate sector.
Information covers every aspect of the home building market: supply compared to expected demand, price distribution of new homes and specific geographic areas that may be over- or underdeveloped.
Zanola will present market updates to HBA every four months. In return, Zanola Co. has the opportunity to sell the in-depth version of its market analysis to HBA members and the community.
While company president Joe Zanola said the Springfield home market faces many of the same problems as others across the country, he said this area is in better shape than most.
"You have population growth and increasing income, among other factors," Zanola told the group of more than 30. "It's hard to say I've got good news for you based on what we're going through, but ... you're in a pretty good position compared to the rest of the world."
Zanola did note that overall, the area is slightly overbuilt. He also said that the area's price curve - which charts the distribution of homes by projected sale price - is healthy, with about 60 percent of homes priced under $225,000.
Presentation attendee Rusty MacLachlan of J. Russell MacLachlan Custom Homes was not surprised by Zanola's findings.
"We all know the area is a little bit overbuilt at the moment," he said. "But that inventory is getting bought up fairly quickly, and it looks like our area is going to bounce back more quickly than on the national level."
Zanola also noted that Greene County's share of new home construction is dropping - only 36 percent of 2008 new home construction in the five-county area is projected to be in Greene County, down from about 61 percent in 2002.
The reaction
MacLachlan, who in January begins a term as Springfield HBA president, said having access to Zanola's information is invaluable to the home-building community.
Without that information, "all (builders) can do is ask around and stick a finger in the air to see which way the wind is blowing, hoping you do the best you can with limited resources," he said. "What this does is very clearly spell out some very detailed information about where our market is and where it's headed. As an individual builder, I couldn't justify the expense of hiring that work to be done."
Where the market is headed, according to Zanola, is through a continued correction. He echoed the sentiments of many in the Springfield building community: Southwest Missouri has not experienced the same peaks as other areas, meaning the subsequent valleys will not be as deep.
"It's a challenging market out there, but you have a lot of positive things you're dealing with here that put you in a better position than many parts of the country," Zanola said, citing population growth and job creation potential in the Ozarks.
HBA Executive Officer Matt Morrow acknowledged the downturn in the home-building market, but he told the group that the slowdown is precisely the reason the partnership with Zanola Co. makes sense for HBA.
"This is one of those times when the market has slowed and there's less going on, and it's an opportunity for all of us to work together and set the table properly," Morrow said. "So when we come out of this, we'll come out much stronger."[[In-content Ad]]
