Detroit — Home builders across the U.S. and in Michigan are feeling more optimistic about business, as the economy continues to improve, more people find jobs and home prices begin to return to normal levels.
"This is a solid feeling. This is movement forward," said David Crowe, chief economist for the National Association of Home Builders. "The black clouds of several years ago are dissipating and people's confidence is getting higher."
Crowe spoke Thursday during a luncheon at the Great Lakes Builders Show, which brought together representatives across the industry and members of various Home Builder Associations throughout the region. Held at Ford Field, it was the first region-wide conference of its kind.
In his role, Crowe looks at economic indicators to determine the outlook for the building industry in the coming years. He said all signs point to a steady recovery over the next few years, creating a sense of comfort among buyers and sellers that is boosting the building trades.
"How people feel is as important as the jobs. If you feel like people are getting hired, things are secure, then you're more likely to move forward with buying a house," he said. "Those levels are back to where they were before the crash."
Michigan's journey to recovery has taken longer than many other states because things fell so far during the recession, said Crowe.
"At the lowest point, Michigan had the worst record in the country, with 10 percent of normal levels of production for single-family homes," he said.
Detroit is currently at 31 percent of its normal levels for single-family home production, with 60 percent recovery expected by 2016, said Crowe.
The housing industry is cyclical, which means there are always going to be good times and bad times. But Crowe said the recovery from this recent recession is unlike any he's seen. Typically, pent up demand for housing combined with low interest rates and builders ready to move would drive the recovery. This time around, things have been slower because job rates continue to improve at a slower pace.
This is particularly true in Michigan, where the economy has had to change and diversify beyond autos and manufacturing, he said.
"Even though we have robust job growth, it is true some of those jobs aren't as high paying as the ones we used to create," he said. "We aren't coming back as strongly in manufacturing field."
For those in the business, the message was reinforcement of what they are seeing every day.
Bob Watson of Watson Custom Builders in Rochester said a few years ago, he was struggling to adjust his business to stay afloat.
"It was slow," said Watson. "We were taking any jobs we could find."
Now, he said, he feels reassured that the boost in business is something that is being sustained across the industry.
"I feel good that what I'm seeing, the phone calls, the traffic, the customers, isn't just me," he said. "It really is getting better."
Sam Palazzolo of Palazzolo Brothers building company says the turnaround has been a relief, but there are still challenges ahead, particularly with the lack of younger workers going into the skilled trades.
"Lack of trades is the biggest stumbling block," said the owner of the Sterling Heights company. "Demand is coming back ... but we couldn't build a thousand more homes with the trades we have now."
Palazzolo said he is pleased with Gov. Rick Snyder's addition of programs in schools to encourage students to go into the skilled and building trades. The governor last month proposed a 2016 fiscal year budget with a 75 percent boost for career and technical education programs and assistance. It's a good start, said Palazzolo.
"We've got to train not just the kids, but their parents," he said. "College isn't for everybody and if we could teach them a trade and pay them well, then why not."