As the tidal wave of the recession recedes, Clermont County is seeing early signs of recovery in the home building and the real estate industry.

"Everybody in our industry is very optimistic," says Dick Jasper, owner of Jasper Homes and president of the Clermont County Builders Association. "The recovery's slower than everybody was anticipating, but it's all heading in the right direction."

In 2005, Clermont County's economy was hopping. Employment and investment figures doubled from 2004 to 2005, with property investments of almost $72 million and 482 new jobs, according to the 2005 Annual Report from the Clermont County Office of Economic Development.

When the housing market plummeted in 2006 that changed.

"Clermont, at one time, was the fastest growing community in the state," Jasper says.

"The whole housing industry has taken a major hit in the last four years, and I think Clermont County is on a recovery similar to the rest of the country."

There's something to be said for weathering the storm. "You know, if you survived this long, you're probably in better shape than you were several years ago," Jasper says with a laugh.


The recession hit small custom
homebuilders hard, with more people staying in their homes, purchasing resale, or buying from large-scale production companies such as Drees, Fischer and M/I Homes, according to Jeff Rosa, Associate Manager of Sibcy Cline Realtors in Anderson.

The vast devaluation of houses due to foreclosures has made it difficult to compete with historically low prices. "What's killing the market is the huge glut of homes that have been foreclosed, or people are just willing to sell for a lower price because they've been sitting on the property for too long," says Mike Grever, owner of MG Custom Homes. "Those will probably take another year or two to be absorbed."

While there are still some foreclosures, the pace has fallen off, according to Clermont County Auditor Linda Fraley. "I think we're seeing a lot of listing," she says.

As of May 5, Rosa's office has sold 92 units for more than $20 million, which is almost identical to the prior year's sales. Those numbers were achieved without the federal tax credit incentive of 2010, so the outlook is positive.

"We had (almost) the wettest month in history, and yet we had an absolutely excellent month of real estate here in our office," Rosa says. "So April showers definitely brought a lot of blooming homes."

With home prices and foreclosures leveling off, the housing market has probably bottomed. "We're starting to see some very positive market responses to a more natural, normal market," Rosa says.

In the Midwest the Pending Home Sales Index rose 3.0 percent in March, according to the National Association of Realtors (NAR).

"The purchase and refinance market is definitely up this year," says Drew Stacey, mortgage consultant with First Place Bank. This May, the "residential mortgage rates are again approaching all time lows."

As the market accelerates and prices come up, custom homebuilders can regain competitive footing with resale.

"We're starting to see some movement on land, people calling and inquiring about lots," Rosa says. "When they inquire about lots, the next thing to follow is builders, so that's a very positive sign as well."


Custom homebuilders have diversified their operations during the last five years, conducting remodels, renovations, and additions or expansions to existing homes to make it through the housing slump.

"A lot of (homebuilders) have had to turn to remodeling and stuff like that to get through hard times," Rosa says.

Until three years ago, Grever exclusively built new residences. "On a typical year, I would do eight to 10 new homes," he says. "With the change in the market, my business is now 50 percent new homes and 50 percent remodels and other things."

Some of the most popular projects are kitchen and bathroom remodeling, or finished basements that offer additional comfortable living space.

The remodeling and renovations are more popular now due to the slow recovery of the housing market. "The majority of people who would have moved or built a house in the past, are simply doing the addition or remodeling," Grever says. "They're realizing that the devaluation of their home is not going to turn around in six months."

Jasper agrees that people are staying in old homes longer, saying, "they like their neighborhood and they want to stay put."

And homeowners in Clermont County have reason to stay put. Eight area schools were rated excellent in report cards issued by the Ohio Department of Education in 2010. The highway system has undergone extensive development since 2006, so the traffic congestion is low, according to Jasper.

"It's a viable community," he says.

While the remodeling business has carried custom homebuilders through the recession, that hasn't been the only key to succes.

"I've been doing more networking," Jasper says. "For custom home builders, a lot of our business is by word of mouth and by referrals. So I've made a more concentrated effort personally in spreading the word of mouth to generate additional business, more clients."


Housing trends from the last few years have continued, such as open floor plans and smaller homes with more amenities. According to Grever, the square footage reduction of his typical custom home has decreased about 10 percent.

"People are "¢ wanting a smaller house with nicer things in it, more the quality versus the size," says Amie Imbus, who co-owns Imbus Builders with her husband Bill. "I don't think people want to spend the time on big houses."

One of those nicer things is a geothermal heat pump system.

"The economy just drove that," Imbus says. "Geothermal costs more to put it in, but people are so concerned about utility costs."

The primary advantage of geothermal is that it generates reliable and continuous energy, according to the U.S. Department of Energy. ClimateMaster manufacturers geothermal heat pump systems that are up to 450 percent efficient, compared to the 75 to 95 percent efficiency of traditional furnaces run with fossil fuels.

"Geothermal is a renewable energy source," says Mike Dempsey, part owner of American Heating & Air Conditioning in Cincinnati. "It's green and it's energy savings."

Geothermal is a heat transfer system, using pipes buried beneath the earth to capture year-round energy. There are different models of geothermal designs: They can be drilled, submerged in water sources, or even placed in trenches only three to six feet deep, provided the property is large enough.

Most geothermal installations are in new construction, because existing houses often don't have good enough insulation, according to Dempsey.

Clermont County has plenty of wide-open spaces that contribute to the appeal of custom homes and geothermal, both of which work better on larger plots of land.

A geothermal installation can cost up to $25,000 for a four-bedroom house, or $15,000 more than a typical heating system.

With the monthly energy savings, a system typically pays for itself in about five to six years.

To top it off, a 30 percent tax credit on geothermal installations is available until 2016, so a geothermal system can be a smart investment.


Custom builders hold a special niche in the economy, stimulating growth for the real estate industry, providing jobs in the construction industry, and driving sales of home furnishings, hardware and lawn care products.

"Our industry is a driving force behind the strength of the economy," Jasper says.

However, the proposed Qualified Residential Mortgage regulation could destabilize the housing market's tentative growth by increasing down payments for most loans from 10 to 20 percent, according to Rosa.

"Housing recovery could not handle it," he says.

The new qualification regulation would also change refinancing by preventing homeowners with less than 25 percent equity in their home from refinancing. The NRA estimates that this would prevent almost 25 million homeowners from refinancing because their equity has deteriorated under the recession.

In Clermont, stability and tenacity will be key as the housing market plods forward.

"If things stay on course the way they are now, we fully expect by this time next year we will be in a state of appreciation," Rosa says.

"We're seeing very positive movement now."