New Housing Starts Stay Strong

February 28, 2003
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New home construction remained healthy in 2002 across the region, as consumers took advantage of low interest rates and, according to one industry executive, opted to put their money into real estate in the wake of losses in the stock market.

Following national trends, housing starts in the four-county region rose a collective 6.1 percent, from 5,255 single-family homes in 2001 to 5,577 units in 2002, according to the Dodge Local Construction Bulletin.

Kent County alone experienced a far larger jump last year in housing starts than the overall region with a 16.7 percent increase over 2001, from 2,294 units to 2,678 units, Dodge reported.

Judy Barnes, executive vice president and chief executive officer for the Home and Building Association of the Greater Grand Rapids Area, attributes the continued health of the industry to mortgage rates that are at 30-year lows and a faltering stock market that has made real estate a more attractive investment.

“Housing is a good investment and people recognize that,” Barnes said. “I think that’s really what you’re seeing and the low interest rates help.”

For the year, the collective value of the new homes built in Kent County rose at a much higher pace of 23.5 percent, from $388.3 million in 2001 to $479.8 million in 2002.

The value of new homes in the Kent-Ottawa-Muskegon-Allegan region rose 16.9 percent from 2001 to 2002, from $800.8 million to $936.4 million.

The communities with the most housing starts in Kent County are, respectively, Wyoming, Gaines Township, Kentwood, Grand Rapids Township and Plainfield Township. In Ottawa County, Georgetown Township, Holland Township, Allendale Township, Grand Haven Township and Park Township are the top markets for housing starts.

Barnes anticipates the strong new-housing market will continue through 2003, although she tempers the expectations with the comments she has used for the past decade: “cautiously optimistic.”

The National Association of Realtors forecasts housing starts of 1.69 million units this year, slightly below the 1.71 million units recorded in 2002.  

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