Happy Days are Here Again?
REGION – After years of plummeting numbers in new home construction, a strong finish in 2010 has given regional construction experts a reason for cautious optimism for 2011.
While the number of land-use permits for single-family homes in the four-county region – Benzie, Kalkaska, Grand Traverse and Leelanau counties – are nowhere near where they were five years ago, some pockets are seeing numbers rise again after bottoming out in 2009, which many consider to be the worst year on record for new home builds.
"The energy has picked up the last couple of months and there are some good reasons to be optimistic for 2011," says Renee Robinson, project coordinator for MAC Custom Homes. "In comparison to last year at this time, we are leaps and bounds ahead. After being so discouraged in the past, it's nice to allow for some optimism now."
Marty Fessler, owner of Prestige Construction Group in Traverse City, is feeling reason to be optimistic too. He says Prestige's business in 2010 was up 50 percent from 2009, and believes 2011 is shaping up to be an even stronger year.
Bill Clous, owner of Traverse City's Eastwood Construction, echoes the sentiment: "2009 was our toughest year in 35 years in the business. The home building economy is on the rise now though. We had a good end to last year. The quality of activity is higher than it has been the past three years, which is an indication that things will continue to improve in 2011."
By the Numbers
Where is the bulk of the action happening? Grand Traverse and Leelanau counties are enjoying the most growth, in particular Grand Traverse County's Garfield Township, which has nearly doubled the number of single-family home permits issued – from 23 in 2009 to 43 in 2010.
Garfield Township building official Carl Studzinski may not be jumping for joy yet – "We are still below what we did in the 1990s and mid-2000s," he says, but he says he isn't complaining either: "Last year was our best since 2006."
Also on the upswing with new residential land-use permits in Grand Traverse county: Acme, Peninsula and Green Lake townships. In Leelanau and Benzie County, the village of Empire and the city of Frankfort also reported slight gains in 2010.
The good news, however, isn't as widespread as some would hope.
In Kalkaska County, 2010 brought a drop in numbers – from 37 permits issued in 2009 to 17 in 2010. And, according to county officials, there are currently no plans for new residential builds in 2011.
East Bay Township is also hoping an end to the decline in new construction comes quick on the heels of a 2010's drop in permits – from 18 in 2009 to 13 in 2010 – a frustrating set of numbers for deputy zoning administrator and planning specialist Leslie Couturier.
"I want to be optimistic, but I'm not seeing the signs yet," says Couturier. "I want nothing more than to be busy issuing permits, but I haven't seen a builder in months."
Build … Smaller?
In addition to a decline in new home builds, the economic downturn has also created a different type of homebuilder: educated consumers who no longer feel that bigger is necessarily better.
Says Robinson: "People are going in different ways now. They are looking at building smaller, higher-quality homes and utilizing as much space as you can with multi-purpose rooms."
"People are being more selective about who they choose as a homebuilder," says Fessler. "They want more for their dollar and are doing a lot more homework. They are choosing builders on a personal level and taking the time to make sure they get what they want."
John Socks, owner of Socks Construction, is experiencing a similar trend with his clients.
"People are downsizing. The economic situation has really opened people's eyes," he says. "Smaller, quality living spaces with multiple-use rooms are popular. People are asking themselves what it is they really need in a home."
Robinson has also noticed that her clients have been influenced by a popular series of books titled The Not So Big House, which emphasizes getting more out of interior spaces.
"The Not So Big House is about one-third smaller than someone's original goal without necessarily cutting the budget. Our clients don't want to sacrifice quality," she says.
Bill Clous has also noticed a change in home building trends that are trying to keep up with the changing needs of consumers.
"People want value engineering. Our most popular model is the 1156-square-foot Edison model. It is extremely well-insulated and comes with a maximum heating cost of $1 a day. Controlling the cost of utilities gives people a better chance of owning their homes for a longer amount of time," he says.
There is also a growing diversity among homebuilders in the area. For some construction companies like Eastwood, first-time homeowners and young families are their primary buyers. For Prestige, most of their clients are building their second or third house. And while the economic downturn has meant a decline in seasonal and retirement homes, both still make up a sizeable part of new home builds in the area.
One of the area's strongest assets in attracting growth, as always, is its natural beauty and quality of life. And while new construction hasn't bounced back region-wide yet, some in the industry feel it is just a matter of time.
Says Fessler: "The Traverse City area is a spot that people are choosing to move to. People from all over want to live here and our area is recovering faster than the rest of the state. Building will stay solid in 2011 and we should see it continue to grow." BN