Focus, Construction, and Real Estate

Parade reveals home-building surge

Now more construction workers are needed to meet the growing demand.

July 17, 2015
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Tearing down older houses to build new ones in their place is a trend that’s re-emerging in parts of West Michigan and a sign that the housing economy is improving. Courtesy Thinkstock.com

Thousands may have attended the 2015 Spring Parade of Homes, but in Nelson Van Elderen’s mind, there were generally only three kinds of visitors.

It’s the third kind of person who can be used to gauge how strong West Michigan’s new-build home market might be in the upcoming year, said Van Elderen, the interim executive officer for the Home Builders Association of Greater Grand Rapids.

“There are some people who are just interested in seeing homes and finding out what’s new in the industry. There are people who are going to do some remodeling and decorating and are looking at designs to see what others are doing,” he said.

“And then there are people who are going to build.”

Those serious, interested-in-building types made a big impression on Van Elderen during this year’s May 22 to June 6 Parade of Homes. The event, which featured 80 homes by 57 builders, had a traffic increase of about 10 percent over last year, he said, adding that nearly 10,000 tickets were sold.

One of the big reveals of this year’s event for Van Elderen was the strong demand for new-built homes in West Michigan, he said.

“I hadn’t been to a Parade in a couple of years, but this year the builders at the Parade of Homes said they were getting a lot more serious inquiries. People wanted to sit down with the builder and talk about times, land, and when they could start,” he said.

“The builders that had Parade of Homes (homes) for sale, I think most of them sold either during or after the parade. Builders I talked to at the parade … said they had a lot more serious inquiries compared to the last few years. That is a big change.”

An event like Parade of Homes is a great marketing tool for the builders who participate and for the builders’ suppliers to showcase their products, Van Elderen said, but it can also serve as a reflection of the growing strength of the new-built home market industry here.

“With our Parade of Homes this year, the Rockford area was a big area. Byron Center was another big area. There’s been a lot of building going on there but pretty much all over,” he said. “It’s not just everyone moving to the suburbs. There’s a lot of residential building. If you drive through East Grand Rapids, you’ll see a lot of homes being torn down and new ones being built.”

Tearing down older houses to build new ones in their place is a trend Van Elderen said he’s starting to see increase. Technology is changing how newer homes are designed, which means although people might still want to live in a certain neighborhood, they want to live in a more updated house. And sometimes that means a full takedown of an older home in order to design and build a new one.

“In some cases, to take an older home and bring it up to the way you’d want it today (isn’t the best choice). People want 10-foot-high ceilings. That’s tough to do with 8-foot ceilings — and then you look at wiring, an open floor plan, energy efficiency (and how it’s) wired for today, and it makes sense to build new,” he said.

Technology and the awareness it brings means design trends are appearing in West Michigan more quickly than before.

“You can’t pick up a business book without reading about accelerated change, and the same goes for housing. It’s going to change … as people’s lifestyles change. There’s much more awareness of energy efficiencies. As Grand Rapids grows and becomes more diverse in its population, we’re not as slow to change as we used to be. Design trends will move quicker,” he said.

“Back when I worked at Standard Lumber, someone would say, ‘Well, here’s the style of cabinet people like down in Florida. It’ll get up here in two years, so be ready for that change.’ But now everything’s available to everyone. Technology changed it.”

Teardowns also are happening on lakes, Van Elderen noted.

“Most of the homes on lakes are cottages and were built in the 1950s and 1960s as summer cottages, and they’re small. They don’t have much insulation, they were put on concrete slabs, so it makes sense to (want to rebuild there),” he said.

Another real issue for new-home builders, Van Elderen said, is there aren’t many properties available to build on within the urban neighborhoods in which people want to live.

“(People) want to be able to walk to do their shopping and go to restaurants and bike — as opposed to having to drive 15 miles every time you want to do something,” he said.

“There used to be an allure to the suburbs; now there’s an allure to the downtown with everything going on.”

Van Elderen said he believes the new-built home market will continue to grow in West Michigan. He doesn’t think it’s going to take a gigantic leap any time soon, but it’s on an upward trajectory and all estimates point to that continuing.

As new residential construction continues to grow, priority must be placed on creating homes that are affordable for all different kinds of people, as well as universal design houses so people can age in place, Van Elderen said.

But one of the big issues for builders in the area isn’t finding space: It’s finding workers.

There’s currently a shortage of trade builders and subcontractors in West Michigan’s construction industry, Van Elderen said, which is why the Home Builders Association has been working to figure out how it can encourage young people to go into the building trades. Its efforts are getting traction on the state level, and the governor’s office also has put out an effort, he said.

“It’ll always be a challenge, but as an industry, we’ve probably not done as a good of a job … marketing the industry as we could have,” he said.

“What we’re trying to show young people … is that you can make a good living. Some people love working outdoors, and these are good career-type jobs. These are jobs where you can grow.”

The economic downturn that hit the Michigan construction industry during the Great Recession turned many workers away from the industry for good. But thanks to the growth spurt in construction in recent years, there now are plenty of jobs.

“A lot of those people got out of the trade altogether and even moved out of the state — then they didn’t come back. There was a fairly long lull in construction until about two years ago. Then it really picked up and gained steam in the residential side. There just weren’t enough people to do the work,” he said.

“Two years ago, people started to feel more confident in their economic situation, and so then property values started to rise. People said, ‘Let’s get back in and do some stuff,’ not just with new construction but also with existing homes and remodeling.

“The future looked pretty bright and it still looks pretty bright.” 

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