Another homebuilder leaves Cincinnati

According to the Cincinnati Enquirer, national homebuilder Ryland Homes is leaving the Greater Cincinnati market. It will finish up its neighborhoods currently under construction first, and will continue to honor its warranties to customers.

This comes on the heels of another national homebuilder Beazer Homes leaving town recently.

If you're thinking that these companies leaving Cincinnati is a bad sign for the market, you are wrong. In fact, it's a good thing. One of the major factors in the recent real estate price downturn has been way too many homes on the market, and the builders are the biggest culprit of this. The departure of Beazer and Ryland means less homes will be built here, and that is exactly one of the things that needs to happen in order for home prices to stabilize and head back up. (Beazer and Ryland have built many fine homes here, so nothing against them in particular).

In fact, the homebuilders' role in the housing market downturn has come under more scrutiny lately, as Congress is poised to give $5 Billion in tax breaks to national homebuilders. It's nice, of course, that Congress wants to help an industry that is hurting. However, it is the big homebuilders (KB, Toll Brothers, Hovnanian, etc.) who just continued to build and build despite all the warning signs of market over-saturation. People are concerned that giving them $5 Billion is going to encourage them to just build more homes, which is not what is needed right now. In fact, maybe we should be paying them to NOT build more homes!

Share your thoughts on this matter with me at jmandel[at]sibcycline.com, or respond on this post.