business & professional
Home Builders Association says the 2013 housing market
looks bright for builders, sellers and buyers.
he housing slump that began
in 2007 is truly over. That's the
word from the Home Builders
Association (HBA) of Southeastern
Michigan's annual trade show, awards
program and economic forecast luncheon,
which took place Feb. 13 in Sterling
David Crowe, chief economist of the
National Association of Home Builders,
walked the 400 attendees through charts
and statistics that showed that the worst is
over and home starts and home prices are
again on the rise.
"Housing is no longer a drag on the
economy and has been contributing to
GDP growth for six straight quarters:'
Crowe said. "Mortgage delinquencies are
down and home affordability is close to
Crowe said he expected unemployment
to remain high throughout 2014, and GDP
growth to remain slow but steady.
Yes, that's good news. Michigan home-
owners, however, are climbing out of a cel-
lar deeper than in most states, so it won't
be until the end of 2014 or beginning of
2015 that the Michigan housing market
returns to near "normal" status.
Nationally, home sales are set to keep
marching upward. Existing-home sales
rose 9.2 percent last year, compared
with 2011, according to the National
Association of Realtors. And new home
starts were up 27.5 percent nationwide,
and 24.3 percent in the Metro Detroit area.
The Metro Detroit area has been on
the "Improving Markets Index" for a year.
Inclusion on that index indicates increas-
ing permits, an improving employment
picture and rising home prices. Home
prices are increasing in Michigan, but
remain 25 percent off peak prices.
The improved housing market is also
adding to employment gains. Larry Cohen,
HBA vice president, said that nothing sup-
ports the economy like new construction
and a healthy building industry.
"You can't outsource construction, con-
crete layers, carpenters or brick layers:'
said the Temple Israel member, who owns
Cohen Homes and Tremont Construction
and has been in business with assistant
Cindy Kraus for 25 years.
According to HBA data, 2012 per-
mits reached their highest annual total
since 2006, with a total of 3,644 single-
family home permits issued in Macomb,
Gov. Snyder presents the Distinguished Service Award for Urban Home Building to
the folks at Home Renewal Systems, front, left to right, Shannon Morgan, Tracey
Katzen and Bernie Glieberman.
Oakland, Wayne and St. Clair counties, a
44 percent increase compared with 2011.
"While we still have a way to go to
return to 40-year average permit activity,
the recovery we've seen since 2009 contin-
ues and is now beginning to accelerate
said Michael Stoskopf, HBAs CEO.
Jewish Builders Honored
According to Herb Lawson of Bloomfield
Hills-based Windham Companies, who
was inducted into the organization's Hall
of Fame at the awards luncheon, "with
pent-up demand, a need for new houses
and interest rates at historic lows, there
could never be a better time to buy:'
Lawson, a Temple
Israel member who is
communities in Detroit,
Estates, an 833-unit
on the site of the former
Herman Gardens Public
said he was "humbled and overwhelmed"
by his induction into the Hall of Fame.
Lawson has developed more than $2 bil-
lion in real estate in his 46-year career.
Honored with the
HBA President's Award
was Rick Kligman, CEO
of Superb Custom
Homes in Plymouth and
2012 HBA president.
During his tenure,
Kligman was instru-
mental in the organiza-
tion's new name (for-
merly called the Building Industry
Association), the SE Michigan Residential
Building Activity Report, a July 2012 rally
for homeownership in Detroit and a
"Made in America/Built in Michigan" ini-
tiative that put the emphasis on
Michigan-made products used in home
building to boost the local economy and
Kligman said he expects to see a con-
tinued rise in pricing.
"Consumers realize that there is a lim-
ited supply of homes and limited land
availability — and we're beginning to see
inflation in building materials:' he said.
Kligman, whose children attend the
Novi-Northville Jewish Learning Center,
adds his company is back in acquisition
mode and is putting up houses in Novi,
Franklin, West Bloomfield and Northville.
Howard Fingeroot, co-founder of
Pinnacle Homes, was honored as
Developer of the Year, along with co-
founder Steve Friedman and president
John DePorre. Pinnacle Homes was able
to achieve remarkable success during
the past slump, opening 10 new home
communities since it opened its doors in
Fingeroot said sales
are strong throughout
including Forest Estates,
a gated community in
Farmington Hills. "My
goal is to close 150
homes and open five
new communities this
year:' he said. "It's a
wonderful market; pric-
es are up so it's a good time to sell, and
new homes are still affordable with inter-
est rates at historic lows:'
Speaking of new home starts in par-
ticular, Fingeroot added, "We're still 30
percent off the 40-year average, which
leaves a lot of room to grow. I think we're
still three to five years away from hitting
that 40-year average:'
Farmington Hills-based Home
Renewal Systems (HRS) was honored for
Distinguished Service for Home Building.
President Tracey Katzen and her father,
Bernie Glieberman, accepted the award
for work they've done stabilizing dis-
tressed neighborhoods through HUD
Neighborhood Stabilization Program grants.
"A good portion of our
business is urban
because we believe in it:'
"Generation Y has been
deprived of an urban
lifestyle, and they want
to live it. Currently,
demand outstrips supply
in Downtown Detroit:'
According to Katzen,
today's urban buyers are interested in
small apartments in walkable communi-
ties. Her family, including children ages
12, 9 and 6, attends Temple Israel.
HRS is working in Freemont, Mich.,
to turn the former high school into
senior apartments. Additional develop-
ment is planned for Detroit, Pontiac and
HBA also honored Michigan Gov. Rick
Snyder with its Distinguished Service to
Government Award for his efforts to turn
around the state's economy. Snyder was on
hand to receive the award.
"Look where we've been:' Snyder told
the crowd. "No one has suffered more over
the last decade than builders. But we're
on the comeback trail and let's look to
brighter days ahead:'
Crowe did paint a fairly positive picture
of the housing market in the year ahead,
unless the government takes actions to
eliminate the mortgage interest tax deduc-
tion or perhaps put a cap on the deduction
for second homes — Michigan has the
most second homes in the nation because
of all its Up North cabins and cottages.
If either of those things were to occur, it
"would be like Armageddon:' Crowe said.
But, all in all, his forecast was good.
"Overall inflation is relatively low, despite
rising prices for building materials:' Crowe
said, adding that rents will continue to go
up and mortgage rates will remain below
4.5 percent through next year.
HBA CEO Stoskopf said, "With sales
prices for existing homes steadily rising,
combined with inventories that are at their
lowest point in years, we are at a point
where new home construction could final-
ly be the comeback story of 2013:'
February 28 • 2013