Housing forecast is improving but still has a way to go.
Two economic forecasters gave somewhat good news to a group of builders and renovators, a new executive committee was sworn in, and four Jews received awards during a Building Industry Association of Southeastern Michigan meeting in Sterling Heights on Feb 15.
Edsel Charles, chairman of the Franklin, Tenn.-based MarketGraphics Research Group, has been doing new-home market research in 21 states including Michigan. Every four months, his company has done a physical, lot-by-lot audit of 1,100 subdivisions in Southeast Michigan. Based on his findings, Charles, who predicted the May 2009 mortgage market meltdown in May 2000, said that investors and homeowners will not recover the lost value of assets, including homes, until May 2014, “but Detroit may take longer.”
David Crowe, PhD, chief economist of the Washington D.C.-based National Association of Home Builders, agreed without attaching a date.
Last year started slow and slumped in early fall, but improved toward the end of the year, he said. Builders’ confidence latest number is 29 compared to the boom years when the number was in the 70s, “so we’re a long way off from a comfort level, but we’ve had five straight months of increase, and that hasn’t happened for a very long time,” Crowe said.
Nationally, new home sales last year of 203,000 “were the worst ever so clearly there is nowhere to go but up,” he said. “It will be a slow climb and even at the end of 2013, we won’t be back to where we should be, but we’ll be well on our way, and that will induce housing starts once we get those sales going and replace the inventory that we sold. We’re looking at a 17 percent increase in housing starts in 2012 and a 37 percent increase in 2013.”
Although he said that 2011 was the worst year in terms of single-family starts since 1942, Crowe said that Detroit should see about 4,700 housing starts in 2013.
He said that the number of foreclosures is decreasing, and there has been a relative decline of mortgages in distress for a couple of years, with the exception of a few concentrated areas.
“In most places I can make that comment and people will feel better,” he said. “Unfortunately, Michigan is one of those concentrations.”
There is some good news, though.
Of the 360 metropolitan areas in the United States, Detroit was one of 98 metro areas that steadily improved in house prices, employment and housing permits in the last six months, he said.
The deepness of the economic mess locally was driven home by Crowe’s next statement.
“Although we are recovering, Michigan is still on the lower end of the spectrum because of how far we fell,” he said. Annual production in Michigan dropped to 10 percent of normal at its lowest point, he said. In comparison, the annual production in North Dakota dropped to 75 percent of normal at its lowest point.
“Michigan’s recovery will be different because the collapse was different,” he said. “Except for some miracle, the climb out of the trough will be at the same level so it’s going to take longer to get to the top.”
Jewish Builders Honored
Al Kligman of Superb Homes Inc. was inducted into the Building Industry Association Hall of Fame.
Kligman of Northville graduated from Wayne State College in 1955, obtained his builder’s license and built his first house in Sterling Township in 1956. He changed the name of his company from Kligman Homes to Superb Homes Inc. in 1962 and has spent the rest of his career living up to the name. He and his wife, Audrey, have three children and seven grandchildren.
Norman Finkelstein of Norwood Homes Ltd. received the Samuel Kreis Award for Distinguished Service to the Building Industry.
Finkelstein of West Bloomfield has developed subdivisions and condominiums for 25 years and has been active in politics, serving on the Orchard Lake Village Planning Commission and being elected a city councilman. He and his wife, Carol, have two children.
Richard Cherkasky of the Richard Group Inc. received the Distinguished Service to BIA’s Charitable Endeavors Award.
Cherkasky of West Bloomfield served on the Jewish Family Service board in 2009 and received a request to help an elderly woman fix a broken step in her home. This led to Project Build!, a joint JFS and
BIA program that provides clients with safe homes through pro bono repairs provided by local builders and suppliers.
He and his wife, Janice, have two children and four grandchildren.
Gordy Oliva of Gordy Oliva Remodeling/Go Barrier Free received the Remodeler of the Year Award.
Oliva of Huntington Woods has been a remodeler for 23 years and was the project coordinator of the first major remodel done by
Gordy and his wife, Leslie, have three children.“Project Build!” Under Gordy’s management, Project Build! renovated the bathroom of a Huntington Woods woman who suffered with MS and enabled her to remain living in her home.
By Harry Kirsbaum|Contributing Writer