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Michigan's new home construction should see continued growth in 2013
  By Melissa Anders |
on January 04, 2013 at 7:30 AM, updated February 05, 2013 at 12:21 PM

LANSING, MI — Michigan home builders anticipate a significant increase in new home permits this year, though that would still leave the industry at less than half of its normal level.
The Home Builders Association of Michigan forecasts 13,928 new home permits in 2013, up from nearly 10,440 permits in 2012.

Final numbers aren’t yet in for last year, but association CEO Bob Filka thinks home permits could inch toward 11,000, thanks to unseasonably mild weather in November and December. That’s up from about 8,000 new homes in 2011.

There’s still a long way to go to get back to “normal.” Michigan historically has averaged more than 30,000 homes per year.

Pent-up demand, improved employment and a healthier market for existing home sales should help boost the industry after several years of devastatingly low activity for Michigan builders.
“We’re very happy to be looking at a positive environment,” Filka said.

Overall home sales and prices are on the rise, according to statistics from more than 40 local realtors’ associations throughout the state compiled by the Michigan Association of Realtors.
The associations tracked 114,996 homes sold through November, up 11 percent from the same point last year, and the average sale price year-to-date is $110,633, up 5 percent from one year earlier.


More good news for the industry came when Gov. Rick Snyder signed legislation last month to change the way inventory or spec homes are taxed.

When the market is healthy, builders often construct homes on speculation to sell to buyers who want a new home but don’t want to go through the building process.

Those homes had been taxed at the non-homestead rate, but under the new law they are now taxed at the lower homestead rate. That reduces the financial risk to builders who may not sell the homes right away, Filka said.


Municipalities have fought to keep the tax from being lowered since it could diminish their revenues.

Filka argues the change is good for communities because it encourages investment in new, improved housing. Some home buyers may bypass a certain town if there are no available inventory homes, he said.

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