Housing Bubble
BIA - Michigan strength in home construction and sales expected 2003
Building Industry Association of Southeastern Michigan (BIA) announced that it is expecting continued strength in new home construction and sales in the region for 2003. The announcement came at the association's 2003 Economic Forecast event at the Novi Expo Center, Novi, Mich.
"We're projecting a five percent increase to 15,037 new housing permits for single family and multi-family homes in our region in 2002," said Steve Perlman, president, BIA. The BIA numbers are for Wayne, Oakland, Macomb, Washtenaw, Monroe, St. Clair and Livingston Counties.
Macomb County saw the largest jump in new housing permits in 2002, up 485 to 3,819, a 14.5 percent increase from 2001. Macomb Township led all cities in new permits in Macomb County, followed by Sterling Heights and Shelby Township.
Wayne County new housing permits increased by 81 to 2,868, a 2.9 percent jump from the year before. Canton remained the hottest area, then Brownstown Township and Northville.
Oakland County new housing permits decreased overall by 99, or 2.9 percent, to 3,336. On the up side in 2002 was Oakland Township followed by Novi and Rochester Hills.
David Seiders, chief economist of the National Association of Home Builders (NAHB), said the numbers for homes locally are amazing, since the nation's recession has hit especially hard in industrial sectors, like metro- Detroit.
"Even more impressive is the fact that prices of metro-Detroit homes continued to increase in real terms, albeit at a slower rate than in recent years," said Seiders. "After the terrorist attacks and ensuing recession, payroll jobs declined about 4.5 percent in metro-Detroit. Yet, home prices continued to climb by four percent or more, a solid increase in real house value," said Seiders.
Utilizing U.S. Commerce Department statistics, Seiders forecasted 2003 new home starts nationally would be 1.633 million, off slightly from 2002 total projections of 1.692 million units. Seiders sees creeping interest rates as part of the reason.
"The Federal Reserve Board will raise the federal funds and bank prime rates by about 0.75 percentage points late in the year, and long-term rates -- including the fixed-rate home mortgage -- will move up by less than a percentage point," said Seiders. "But even that won't happen until late in the year, and still rates will remain near historic lows."
"GDP is expected to grow by 2.8 percent, payroll employment will expand by 2.2 million, unemployment will drop to 5.5 percent by late in the year, inflation will be only about two percent," all good numbers for the economy and building industry, said Seiders.
Headquartered in Farmington Hills, BIA is a trade association representing over 2,200 builders, remodelers, multi-family property owners, developers and suppliers to the single family and multifamily residential construction industry. BIA is affiliated with the Michigan Association of Home Builders in Lansing and the National Association of Home Builders in Washington, D.C. Membership nationwide includes over 200,000 individuals and companies.
Source: Building Industry Association of Southeastern Michigan
