New home construction on upswing

Like a variable-speed saw, the local construction market may be starting to hum, but it's nowhere near full speed.
Marie Havenga
Dec 22, 2012

 

“I think it's positive, but I don't know if we're out of the woods yet,” said Mark Knudsen, director of the Ottawa County Planning and Performance Improvement Department. “I'm hearing builders are starting to pick up more work, but it's cautious optimism. I think we have a ways to go before the average business person and consumer feel the confidence they felt five or 10 years ago.”

The Tri-Cities market — which includes the cities of Grand Haven and Ferrysburg, Village of Spring Lake, and Grand Haven and Spring Lake townships — hit high gear in 2003 with 234 home starts, according to Knudsen. That number dropped to 22 in 2009 when the construction market nationwide tumbled into the cellar.

See a chart of the home starts in Ottawa County for the past 10 years by click the Related File below this story.

Although gains have been modest, the Tri-Cities market has outpaced the county, state and nation in new home starts since 2009. By 2011, this area boasted 59 new home starts, a 168 percent jump.

Ottawa County starts increased 66 percent during that same two-year period and Michigan single-family construction jumped 27 percent, while national numbers dropped 5 percent.

In the first three quarters of this year, Knudsen said there have been close to 60 new home starts in the five municipalities. He projects that number will reach 80 by year's end.

“I think the majority of this has to do with pent-up demand," Knudsen said. "People are beginning to feel now is the time to build. There's definitely been a bigger increase in residential than in commercial.”

The county's commercial and industrial records only date back to 2010. There was one project in the Tri-Cities that year, seven in 2011 and five this year, according to Knudsen.

This follows the national pattern, in which private residential spending jumped 21 percent since last year — its highest level since November 2008, according to the Associated General Contractors of America.

Non-residential construction is up 11 percent since last year, according to national statistics.

The contractors association said construction spending in all sectors reached a 37-month high of $872 billion in October, up 1.4 percent from September and 9.6 percent since last year.

Keep in mind that not all building permits issued by local offices result in a finished project; therefore, there is some variation in numbers. But here are some notable trends in local residential home starts:

Grand Haven – The city is close to built-out, but tear-downs and several vacant lots opened the opportunity for a half-dozen homes to be constructed this year. That's the most in more than a decade. There were no home starts in 2009, three in 2010 and one in 2011. City Planner Kristin Turkelson said nearly 20 more new homes are in the planning stages.

Grand Haven Township – The township hit a high of 156 new homes in 2003, and then slumped to nine in 2009. This year stands at 35 new starts, up two from 2011.

Ferrysburg – The city topped out at 28 new homes in 2005, and then slumped to four in 2009 and one in 2010. Three homes came to fruition this year, up from two in 2011.

Spring Lake Village – There were no new starts from 2003-09, then one in 2010, and three both last year and this year.

Spring Lake Township – The township hit 101 home starts in 2003, and then bottomed out at 15 in 2009. There were 12 starts last year and 21 this year. Many of those are tear-down/rebuilds on Spring Lake, according to Township Community Services Director Lukas Hill.

In the commercial and industrial arenas, there have been 11 new facility permits issued in the past two years, all of them in Grand Haven city and township, according to Knudsen.

Commercial construction in the city peaked in 2006 and 2007 with projects such as Grand Landing, the Community Center, Loutit District Library and Grand Haven Cottages.

Turkelson said smaller jobs are the ticket today — including kitchen and bathroom remodeling, and roofing and siding improvements.

“We've been seeing reinvestment to residential homes and the industrial areas,” the Grand Haven city planner said. “We're seeing remodels of office space.”

Turkelson said she's also received several requests for modular office space.

“They're hesitant to make some of the capital investment that would go along with enlarging existing facilities, but they're ready to add staff again,” she said.

 

 

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