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Home Building Reaches Highest Level in 10 Years

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Southeast Michigan homebuilding has reached the highest level in at least 10 years. As of October, there had been 21,600 housing starts in the region. Amazingly, a lot of this has been in more built up areas. However developers are still going crazy in the far out suburbs. People are spilling into Genesee County (where I live) from other counties in the Detroit Metro because land is so cheap. Unfortunately they bring traffic congestion with them. My own little city of 35,000 has issued some 6500 building permits since 2000 & is expected to grow to around 55,000 by 2010, which is scary, considering that when I moved here 12 years ago it was a town between a bunch of cornfields!

Home building reaches highest level in a decade

November 21, 2003



More new homes have been started this year in metro Detroit than in the past 10 years and maybe longer -- 21,600 as of October. This is important news even for those of us who don't own a building company.

At a time when GM auto sales are down 7 percent for the year and Ford down 2 percent, house and condo building is up a hearty 9.8 percent. What's more, some of that growth comes in the stagnant high-priced market.

"We're seeing demand start to reappear a bit in the $350,000 to $500,000 market," says Steven Perlman, president of the Building Industry Association of Southeast Michigan.

He says shoppers coming through model homes are "More buyers -- fewer tire kickers."

Why do non-builders care? Construction is one big source of good-paying Michigan jobs. As of September this year, 92,800 people in southeast Michigan worked in some aspect of building. Around the state that was 212,200.

But beyond that, every new house sends more money rippling through the economy as owners buy sod, blinds, appliances, furniture and so on.

The house numbers come from Housing Consultants in Clarkston, which tracks house permits for the southeast Michigan builders' group. For the 10 years that company has charted new house construction, this is the highest number of new homes yet, a spokesman said. It covers nine counties -- Wayne, Oakland, Macomb, Washtenaw, Genesee, Livingston, Monroe, St. Clair and Lapeer.

Back to the cities

The data show a few trends that offer surprises -- especially the high rate of building in areas that are almost full. Conventional wisdom says developers are moving to the hinterlands -- like Genesee County's Grand Blanc -- where land is less expensive.

Actually it seems much building has shifted into older, built-up cities. In Westland, for example, the number of home permits jumped from 161 last year to 373 this year, the 11th-highest number in metro Detroit.

In Southgate they jumped from 45 to 211 permits, in Pontiac from 79 to 185 permits.

That's because more builders are coming back into central cities, often building on smaller pieces of land, says Perlman.

The result is that buyers now have a large choice of new construction condos and townhouses in established cities that already have schools, sidewalks and streetlights -- infill housing.

"Over the last 24 months it's become a much bigger part of our product line," Perlman says about his company, Ivanhoe-Huntley Homes.

"We used to build purely single-family. Now we have about a 60-40 ratio of single-family to condos. It's primarily based on adding more infill."

Wayne County

As usual in Wayne County, more new homes were built in Canton Township than any other spot.

But Canton was followed by a surprise second and third place -- Downriver's Brownstown Township with 681 homes so far this year (including 330 rentals), and the city of Detroit with 671 homes (including 384 rentals).

Macomb County

As usual, Macomb Township leads all of Michigan in residential growth -- 1,241 houses this year.

After that, in Macomb County, the most homes were built in Sterling Heights -- 765 -- and Chesterfield Township -- 577. None of these were rentals.

Oakland County

In Oakland County, Novi has the most new houses for the second year in a row -- 611, including 358 rentals.

That was followed by Commerce Township -- 370 -- and Rochester Hills -- 303, both with no rentals.

Washtenaw County

Washtenaw County -- that powerhouse of new construction -- saw house building continue to rise. Overall it jumped from 1,902 last year to 2,239 this year.

Washtenaw developers are starting up new subdivisions in the wide-open spaces of Superior Township, where new houses rose from 85 through October last year to 300 so far this year. Building more than doubled in Pittsfield Township, from 172 last year to 370 this year.

Ypsilanti Township stayed at the top of Washtenaw County new construction with 417 houses so far this year, though that was down a bit from 502 at this time last year.

Positive trends

Overall this year, the number of rentals, which had swelled during the recession, was down, while houses and for-sale condos were up.

Southeast Michigan's 2003 house-building boom was far better than a top housing economist had forecast for this area.

Dave Seiders, chief economist for the National Association of Home Builders, spoke to metro Detroit builders last January, forecasting the year to come.

Seiders usually sees the new house market through optimistic glasses.

But this year, in the chill of the recession, he told metro Detroit builders to expect new house sales to stay flat during 2003 or fall off by 3 to 5 percent.

The increase of almost 10 percent was beyond most expectations.

"I thought sales were going to stay at the same level," says Perlman. In the early months of 2003, new houses did maintain the same level, he says. "Now we're seeing housing leading us out of the slower period."

Contact JUDY ROSE at 313-222-6614 or [email protected]

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DAM SPRAWL  :angry:

LOL. Even the city of Detroit is mostly sprawl. There aren't many rowhouses, mostly just old single family homes. But we are the motor city, so what can you expect but early sprawl?

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