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Handyman: Home starts projected to rise 8 percent

Glenn Haege
Special to The Detroit News

The recent attendance at the Novi Home Improvement show indicated an uptick in homeowner’s interest in home remodeling. But does that interest also extend to new home building as well?

According to the Home Builders Association of Michigan’s (HBAofMichigan.com) annual building forecast for 2015, projections are that 13,701 single-family home permits will be pulled across the state, an 8 percent increase from the 12,735 in 2014. But that number, which is about half the permits we saw in the building heydays, could actually be larger if builders weren’t faced with a shortage of labor.

In a HBA Michigan member survey, an overwhelming majority of Michigan homebuilders pointed to workforce-related problems as one of the industry’s top issues.

“We saw a delay of two or three months for framing crews to get to sites last year, and we expect these types of workforce issues to continue this year,” said Bob Filka, CEO of the HBA of Michigan.

In addition to workforce issues, Filka said that financing issues will also impact homebuilders’ ability to build spec homes as they have in the past.

“We are also seeing that many scattered site builders that build around three to six homes a year are having a hard time finding lots to build on in part because the bigger developers bought up most of the property for their developments,” Filka said. “It will be a big challenge to be able to supply enough homes to meet the demand this year.”

Michael Stoskopf, the executive director of the Home Builders Association of Southeast Michigan, builders.org, said the forecast is on track for the strongest year since 2005.

“With the job market improving in the state and oil prices lower, people have more money right now to spend on other things like home remodeling or even a new home,” Stoskopf said.

Stoskopf predicts that the I-96 corridor will be among the hottest new home markets. Areas like Mount Pleasant and Traverse City should have increased activity in building for the second-home market.

Sam Palazzolo, a partner in Palazzolo Brothers, (palazzolobrothers.com), agrees that while 2015 is looking like a good year for homebuilders, labor will continue to be an issue.

“We can’t get enough skilled workers in the state, “he said. “A whole generation of skilled-trades workers retired and another generation decided not to go into the trades.”

Palazzolo said that he is seeing people wanting new homes in urban areas like Birmingham, Plymouth or Rochester that have the amenities of a community.

“People want amenities in their home development, such as stores and restaurants, and condos are coming back as the Baby Boomers sell their homes and are looking to downsize,” he said. With the interest in condos on the rise, Palazzolo said one of his most popular projects is the 112 unit Tall Oaks condominium development in Clinton Township, were the homes run in the 1,800- to 2,000- square-foot range.

But while the baby boomers still have an impact on new home sales, Palazzolo and Stoskopf see younger buyers like the millennials changing the market in the future.

“While there are 62 million Baby Boomers out there, there are around 79 million millennials,” Palazzolo said. “While we have a very low first-time new homebuyer rate these days, the millennials are starting to get into the market.”

And that means the housing trends will also change with this influx of younger buyers.

“As the millennials enter the new home market, they are looking for a loft or condo close to a walkable city,” Stoskopf added.

“We are going in the right direction, and 2016 could be even better,” Palazzolo concluded.

With the shortage of labor issues continuing, it is just as important to start your new homebuying process now, just like you would a home remodeling project. Because the longer you wait, the longer it will take for you to get into that new home of your dreams.

If you would like to suggest a question for this column, email askglenn@masterhandyman.com. If you want to talk to Glenn Haege, call his “Handyman Show” on WJR-AM (760) at (866) ASK GLENN, (866) 275-4536 between noon and 2 p.m. Saturday and Sunday. “The Handyman Show” can be heard on more than 130 radio stations.