Homebuilding market reflects bustling economy
Interest growing in Grand Rapids’ fall Parade of Homes, which runs through Oct. 22.
(As seen on WZZM TV 13) West Michigan homebuilders are a confident bunch, and the numbers bear out that self-assurance.
Prior to the Home Builders Association of Greater Grand Rapids’ spring Parade of Homes, 20 of the 40 spec homes were purchased, said Andy Lofgren, HBAGRR executive officer. He said to have 40 included in the parade was a sign of confidence, and to have half purchased prior to the event showed the builders were correct.
The summer showed no signs of slowing, either, as HBAGRR is in the midst of its fall Parade of Homes, which features nearly 40 homes ranging from $200,000 to more than $1 million. The event runs through Oct. 22.
The spring event sold 11,000 tickets and had more than 135,000 home tours, and while the fall event won’t be as big, Lofgren said the event is much younger and in a season not traditionally known for home building excitement.
“Spring in Michigan, people like to get out, start to plan and see the houses,” he said. “In the fall, you see the serious people come back with more thorough walkthroughs for the details.”
Tickets sold through the first weekend of the fall parade already account for 60 percent of those sold last year, Lofgren said, another indicator he takes as interest in the home building market, just as was the spike in spec homes in the spring.
“Our members have a lot of confidence in the market right now,” he said. “The economy is strong, and people want to move here.”
Among the chief reasons Lofgren cited for confidence are events and attributes in Grand Rapids either retaining or attracting residents, such as ArtPrize and the vibrant brewery and entertainment options. He also said strong job growth and prospects are a benefit and early indicators are positive for Switch’s presence in the community as it relates to the homebuilder market. Switch is a Nevada-based company building a regional data center in Gaines Township.
Despite the common belief millennials are holding off on buying their first homes, Lofgren said the strong positive in-migration of the demographic in Kent and Ottawa counties is a long-term positive for West Michigan’s housing economy.
“Typically, the young want to live in more urban environments, and anytime someone moves here, it creates a new demand for housing in some form or another,” he said. “When we keep young people here and not lose them to places like Chicago, they eventually might buy homes in Sparta, Byron Center, those kinds of communities.”
He said Grand Rapids has gone from a place that is known as a good place for families to one that is great for everyone, ranging from millennials to families to retiring baby boomers.
Of the 40 homes in the fall’s parade of homes, 10 are townhomes or condos targeted toward baby boomers, which Lofgren said is a growing segment of the industry looking to downsize as families move out.
Because of the interest in West Michigan from all demographics, Lofgren said he expects more mixed-type housing developments to begin popping up, such as the one by Eastbrook Homes on White Lake in Whitehall. The development has 150 units of single-family homes, attached and detached condos, as well as cottage homes.
There are several concerns that come with the growth, Lofgren said, as he’s interested to see how the population handles the growing pains of traffic and lack of, or more expensive, parking. He also said open land for housing developments eventually could become an issue.
Together, with the housing developments — including multi-family apartments — are all signs of a vibrant, positive economy, said Lofgren, who previously was the executive director of the Newaygo County Economic Development Office.
With positive outlook in growth for the West Michigan homebuilding industry, Lofgren said his main goal in 2017 is to increase the exposure of his member builders and suppliers. HBAGRR is working on a website database to act as a one-stop source for potential homebuyers, renovators and repairs to stop and find the best business for their needs, he said.
“We want to go beyond the two parades and a few events we have,” he said. “We want to be the first place they look to build new or remodel.
“We’re trying to help the industry be more visible 12 months of the year.”