Is new construction back? Residential building permits up 35 percent in Washtenaw County
This home is under construction home in Pittsfield Township's Kirtland Hills neighborhood. Regional housing data show there were 107 homes built in the township last year.
Daniel Brenner | AnnArbor.com
New home construction is slowly making a comeback in Washtenaw County.
That’s the message from local builders, real estate experts and county-specific data, which show residential building permits were up 35 percent in 2012 compared with the previous year.
“We’re actually starting to see new home construction come back pretty strong right now,” said Maureen Sloan, chief executive officer of the Builders & Remodelers Association of Greater Ann Arbor.
“It appears the low inventory (of homes for sale) has prompted many people to look at new construction to get what they’re looking for,” she continued.
Houses are being built in subdivisions where construction was mostly stagnant for years, including Scio Township’s Polo Fields, Legacy Heights in Saline and Kirtland Hills in Pittsfield Township. Meanwhile, regional and national players like Trowbridge Companies and Toll Brothers have re-entered the Washtenaw County market with plans to build several dozen homes.
Washtenaw County permits for single-family home construction totaled 315 in 2012, up 35 percent from 2011 and nearly double the amount of permits filed in 2009, according to data compiled by the Southeast Michigan Council of Governments (SEMCOG).
Pittsfield Township led the county in new construction, with 107 homes built in 2012 compared with 33 homes in 2009. Other leaders in the county were Dexter, with 31 homes built last year, and Scio Township, with 27 homes built.
“There has been a huge upsurge of interest,” said Doug Selby of Ann Arbor’s Meadowlark Builders, which specializes in green building and remodeling. “I would say we’ve had up to triple the amount of leads for new homes just since the third quarter of 2012.”
These construction trends in Washtenaw County are reflective of developments both regionally and nationally; the Home Builders Association of Michigan predicts 14,000 residential building permits this year in Michigan, while U.S. home construction rates are the highest in years.
To be sure, the number of new homes is low compared with Washtenaw County’s construction boom from 2000 to 2005, when builders were adding 1,100 to 2,000 houses each year.
And because many current projects are ones that were stalled for years, Washtenaw County hasn’t experienced a significant uptick in the land values that plummeted during the recession, said Richard Timmons of Colliers International.
“We’ve seen a little interest in vacant land, but not a great deal,” he said. “As (developers) absorb existing lots, we would anticipate that we’d see an increase in land values that we haven’t seen yet.”
Local homebuilder Jim Haeussler of Peters Building Co. said in order for the county to return to a “normal market,” home sale prices have to rise at least 10 percent to 15 percent.
The average home sale price in the county was $210,616 in 2012, a 15.5 percent increase since 2009 but still low compared with sale prices a decade ago, according to the Ann Arbor Area Board of Realtors. The board’s data doesn’t separately track new home sales, but the U.S. Department of Housing and Urban Development shows the average sale price of new homes in December was $304,000.
“A house/lot combination is still selling below what it would cost to reproduce today…it’s not sustainable because nobody is going to go out and develop a lot to lose money.”
Still, Haeussler and other builders are encouraged; Haeussler said he’s currently working on more than 25 homes on already-developed lots — a significant improvement over the past few years. He’s also developing “spec” homes, which shows his confidence in the market.
“We’ve been fortunate in that anything we had as a spec has been sold and we’re building some more,” he said. “At the current time, if we start a spec home, it’s usually sold by the time it gets framed.”
He is currently working on homes in Kirtland Hills in Pittsfield Township, Legacy Heights in Saline, Dexter Crossing and Westridge in Dexter, and Harwood Farms in Saline.
Haeussler attributes that demand to the low inventory of homes for sale in the county and increasing employment. Selby agreed, adding that historically low interest rates and bank lending trends are bringing more people to the market.
Jim Acheson of Ann Arbor’s Acheson Builders, a company that specializes in remodeling homes, said his business was up 100 percent last year. Thanks to improving economic factors, he said more people in the county are choosing to invest in existing homes.
“It’s encouraging,” he said. “It looked pretty bleak for a while.”
Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
Roger Kuhlman
Mon, Feb 11, 2013 : 9:56 p.m.
Just what Washtenaw County needs--the return of suburban and exurban sprawl. Where are the left-wing Democratic politicians who claim to have environmental credentials saying that Washtenaw county and its environment do need to have more sprawl.
Blue Marker
Tue, Feb 12, 2013 : 8:41 p.m.
Most of the new residential construction is taking place within subdivisions that already exist. Open, vacant lots that went un-sold in the last boom. What this has to do with "left-wing" politics is well beyond me.
Ann English
Mon, Feb 11, 2013 : 3:14 a.m.
The new house being built right now on Arlington, very near Washtenaw Avenue, will be a medium-size house, and also uses the material services of Chelsea Lumber; it just isn't as obvious as this other house photographed above. But it is further along with the wood framework. Some of the houses in this old subdivision are medium-sized, too, unlike the million-dollar-looking ones up further on Devonshire.
kuriooo
Mon, Feb 11, 2013 : 2:47 a.m.
I 'd like to see more single family homes in the 250-350k range, not excessively large but with better designs for northern climates - ie, more natural sunlight, great mud rooms in entryways with large closets, open floor plans, lower ceilings for better winter heating efficiency (ie, 8 foot vs. the huge 15 or more foot ceilings of the 90s and 2000's construction).
Blue Marker
Sun, Feb 10, 2013 : 2:12 p.m.
I work for a supplier in the area and it's my experience residential is and has been on the rise the last two years. We're delivering material all over S.E. Michigan, including the Kirtland site mentioned in the story. For those who what to complain this is certainly the forum for it. But after a decade of difficult economy I'm happy for a positive sign.
Jeffersonian Liberal
Sun, Feb 10, 2013 : 1:08 p.m.
In the mean time the Progressive Pinheads continue to use your money to buy up farm land, artificially driving up the cost of available land and existing property. Jump in your little clown cars and drive an hour west of the Peoples Republic and you'd be amazed to find that there is plenty of farm land.
Basic Bob
Sun, Feb 10, 2013 : 9:11 p.m.
I question how much the greenbelt program has prevented sprawl or raised city property values. The recent recession has done more to inhibit development of farmland into luxury homes than any expenditure by the pinheads could ever hope.
timjbd
Sun, Feb 10, 2013 : 5:06 p.m.
You love sprawl?
Scott Reed
Sat, Feb 9, 2013 : 10:59 p.m.
We need more development in the downtown - more mixed use residential, office, and retail buildings in a walkable neighborhood. The last thing Washtenaw or any county needs is more strip malls and McMansions.
Ann English
Sun, Feb 10, 2013 : 12:14 a.m.
There's a new house being built on Arlington, right close to Washtenaw Avenue. It will probably be a large house, not a medium-sized one like those on Arcadia and Landin (Kirtland Hills neighborhood).
cornbread
Sat, Feb 9, 2013 : 7:35 p.m.
We don't need any news homes in this area . Sorry construction and other skilled trades.
Wolf's Bane
Sun, Feb 10, 2013 : 2:51 p.m.
HUh?
johnnya2
Sun, Feb 10, 2013 : 12:30 a.m.
So if there is a VERY low inventory of houses on the market, and homes are selling rapidly, why wouldnt an area need more? Oh thats right, somebody named cornbread knows more abotu supply and demand than economist
Wolf's Bane
Sat, Feb 9, 2013 : 3:57 p.m.
A house goes up for sale in the Waterhill neighborhood and within 24 hours it has 16+ bids!!! Yeah, new and existing real estate is hot.
Ann English
Sun, Feb 10, 2013 : 12:11 a.m.
Is there such a house on Spring Street today? What I've noticed on Spring Street south of Summit Street is a house I would describe as 'BLIGHT'! Yet there has been no annarbor.com reporting on that house, on the east side of Spring Street.
Homeland Conspiracy
Sat, Feb 9, 2013 : 3:10 p.m.
The picture sure is a nice ad for Chelsea Lumber
Ann English
Fri, Feb 15, 2013 : 12:36 a.m.
I recently drove through the Kirtland Hills subdivision, and a LARGE house under construction there has Chelsea Lumber written all over its wood. It's on Landin Street.
Ann English
Sun, Feb 10, 2013 : 12:08 a.m.
If Kirtland Hills is off of Ellsworth, containing Burnham Drive, then Chelsea Lumber is used for medium-sized houses. The houses on Briar Parkway to the east are large houses.
MichDish
Sat, Feb 9, 2013 : 5:59 p.m.
I had the same thought, but I do business there and can say they're worth it! You get what you pay for!!
a2citizen
Sat, Feb 9, 2013 : 4:08 p.m.
Because "Home Depot" or "Lowes" would be so much more bueno-er.
conundrummy
Sat, Feb 9, 2013 : 2:52 p.m.
At Yousaidwhat. Don't you know anything about the housing market?? It's easy to figure out what the 35% is referring to and why it is relevant. First you take the hypotenuse of the number of houses built within a 3 year biannual period. You take the coefficient of that number and if any of the numbers are prime you multiply them by the sq of the preceding years number of permits going back 1. This number is amortized over a 6 month period and then you add 35. It's so easy and obvious! Duh!
YouSaidWhat?
Sat, Feb 9, 2013 : 2:24 p.m.
Oh Lizzy, such a misleading headline. A 35% increase over what? A depressed market. That seemingly "large" percentage jump is almost meaningless. You also reference 2009 when the economy was in a nosedive and the Obama economy was frozen in time. Show us how this all compares to 2007. The last normal year in America.
Lizzy Alfs
Mon, Feb 11, 2013 : 2:59 p.m.
The story talks a lot about how these numbers are still historically low, @yousaidwhat. "To be sure, the number of new homes is low compared with Washtenaw County's construction boom from 2000 to 2005, when builders were adding 1,100 to 2,000 houses each year." The point is, new construction is coming back -- albeit slowly -- from the years when building was extremely sluggish. And the headline is accurate - building permits were up 35 percent in 2012 over 2011, and almost a 100 percent increase over 2009.
GoNavy
Sat, Feb 9, 2013 : 10:51 p.m.
"Washtenaw County permits for single-family home construction totaled 315 in 2012, up 35 percent from 2011 and nearly double the amount of permits filed in 2009..." As this town is a center of higher learning and all, I'm confident you have the algebraic skills to deduce the answer...
jcj
Sat, Feb 9, 2013 : 5:44 p.m.
You Did You read the article or just the headline?
jcj
Sat, Feb 9, 2013 : 4:13 p.m.
A 35% increase from any point is not meaningless.It show a direction other than down! How meaningless would a 35% increase in your mortgage be?
Kafkaland
Sat, Feb 9, 2013 : 4:04 p.m.
It's very hard to pick a good baseline. 2006 was definitely a bubble year, and 2007 was locally already starting to melt down as Pfizer announced its closing in early 2007. I would hardly call a year that's so precipitously on the edge between bubble and meltdown a "normal" year. It was anything but.
Homeland Conspiracy
Sat, Feb 9, 2013 : 3:08 p.m.
Google it...
PLGreen
Sat, Feb 9, 2013 : 1:55 p.m.
One question comes to mind. How many of the "new homes" in Scio Township and Dexter were actually replacement homes as a result of the tornado? I believe these replacement homes are treated as a new home for the permitting process, I could be wrong but I don't think so.
Blue Marker
Sun, Feb 10, 2013 : 2:04 p.m.
I don't have any stats but I believe those were mostly repairs, not replacements.
Jack Gladney
Sat, Feb 9, 2013 : 4 p.m.
Google it.