Jeff and Mandy Robert enjoyed their home in Clinton Township for several years, but that changed when the family grew into two adults and four active children aged 8 to 17 with their own friends.
What used to be a 950 square foot ranch has turned into a crowded box.
“We needed more space and the interest rates were really low,” Mandy said.
So, she and Jeff made the decision to sell their home and join the group of buyers looking for homes in a market that has low inventory and where the asking price is just a starting point for those. looking to make an offer.
Their budget was $ 200,000.
After a few weeks of shopping, however, they felt the need to crank it up to $ 250,000, and even then they struggled to find anything decent in their price range.
“We looked everywhere from St. Clair Shores and New Baltimore to Waterford and everywhere in between,” Mandy said.
Some of the homes that looked good in the photos online were not in person.
There was one house they found nice and affordable, but it was in Waterford and too far of a daily commute for Jeff, who is a detective with the Detroit Police Department.
“We couldn’t find anything, so I went on Zillow,” said Jeff, whose online search for resale homes led to his discovery of new properties being developed by Lombardo Homes in New Haven, with an upfront cost. of $ 208,000.
This alone led them to believe that new construction might be the way to go and meeting with the builder began the process of a newly built house.
“We kind of accepted that it would be a good move for us,” Mandy said.
New construction trends
“The home selling market is always very active,” said Jessica Bélanger, a RE / MAX agent from Southeast Michigan, who helped the Roberts navigate their way through the buying process. of a house. “Available properties always receive between four and 10 bids and at least 10% more than the asking price.”
Some buyers are determined to find a home that’s already built that just needs updating, Bélanger said, but others who can’t find what they want in their price range or don’t like the idea to look down the barrel of a gun in terms of the looming costs associated with upgrades to a house that someone else sells making the transition to building a new home.
As a result, building permits for the construction of new homes have reached an unprecedented level since 2007.
According to residential permit data compiled by the Home Builder’s Association of Michigan (HBA), a total of 10,219 single-family home permits were issued in Michigan from January through July.
“This year’s total is 44% higher than the same period in 2020, although last year’s totals were depressed due to the two-month industry shutdown caused by the response to the COVID pandemic, ”said Bob Filka, CEO of HBA of Michigan.
The townships of Macomb and Shelby are among the areas in Macomb County with the highest number of new home construction.
Macomb Township issued 310 permits in 2020 and 326 in 2021. Shelby Township issued 238 in 2020 and 191 in 2021.
Other areas seeing the greatest influx of new residential construction include:
- Canton of Chesterfield (145 in 2020 and 326 in 2021)
- Sterling Heights (99 and 109)
- New Haven (110 and 47)
- Canton of Washington (62 and 89)
- Township of Clinton (34 and 82)
- Township of Bruce (42 and 44)
- Shores of Sainte-Claire (55 and 11)
- Warren (56 and 8)
However, despite the new construction, there is still a low inventory of newly built single family homes.
Want to build
Filka said the increase in construction of new single-family homes indicates sustained demand from buyers and continued capacity to build at a time when housing stock remains low and demand from buyers remains high.
He added that the latest permit numbers are still well below pre-recession totals, with homes under construction costing more to build and selling for a higher price.
The average value of a new housing permit is more than 13% higher than it was in September 2019.
“We’ve had over a decade of a building environment where the vast majority of new homes and renovations that have taken place are at the high end of the market. As a builder you really can’t make a lot of money below $ 325,000 unless you get higher density, which is often a challenge for local governments, ”said Filka.
The average cost of a newly built home in Macomb or Shelby Township is around $ 400,000, but there are subdivisions in New Haven and Chesterfield under $ 300,000.
Yet, as new construction helps the hungry market, labor and material costs combined with a shortage of workers and an unpredictable supply chain have been frustrating for builders and buyers.
Paul Olivieri, owner of Paul Anthony Homes in Shelby Township, has been building custom homes for over 18 years and even under normal conditions he can expect to face a few obstacles.
But it’s not Mother Nature that’s causing problems these days.
“The biggest problem for me has been the wait for the contractors,” Olivieri said, watching a backhoe operator move a pile of soil near the foundation of a new house in Royal Park Estates, where houses are starting to grow. approximately $ 500,000.
“At one point, I could build a house in eight months,” he said. “Now it takes over a year. “
Rhonda Gilbert, 65, and her husband build a house in West Bloomfield, but months later her builder is still waiting for materials and workers to finish the job.
“We started building in January, but we were supposed to start building in November 2020,” she said. “Everyone is so busy right now in terms of trades.
“It’s like keeping cats,” she added. “There is still a series of things that are not being done. I’m still waiting for the kitchen cabinets.
Filka said he had just spoken to a member of the association that builds 10 to 15 houses a year.
“He’s booked until 2023, so you’d think he’s very busy, but he hasn’t finished a project yet this year, because he’s waiting on a door, he’s waiting for appliances, he’s waiting for other things, ”Filka said. “The products you could get to your construction site in days now take months. “
There’s always a urge to work around missing pieces like cabinetry, but it can create problems with everything that follows like drywall, backsplashes and flooring, Olivieri said, and who wants it after moved into a $ 700,000 house.
The best advice for buyers considering new construction is to be patient and aware.
“Ask questions when you meet a builder,” said Jeanette Schneider, president of RE / MAX Southeast Michigan.
The cost of materials may increase, but does that mean it will be passed on to you? What does the base price include? How much are the updates?
Jeff and Mandy added a window to their powder room, marble counters in the kitchen, and spits to their staircase rather than a solid wall and each upgrade added to their base cost.
Buyers can also ask a builder to make changes to a floor plan.
Olivieri builds mansions in Macomb, but he said that doesn’t mean a custom builder can’t build a 2,200-square-foot home for a potential buyer.
Despite the rising costs of lumber and other materials, Bélanger said that in all of her years as a real estate agent, she hasn’t seen a builder pass this on to her clients.
But for buyers, it’s important to ask if you need to talk about costs quarterly.
Schneider also recommends that buyers discuss the changing environment with their lender.
If the cost of your home goes up by $ 5,000, can you increase the loan?
“All of this needs to be communicated,” said Schneider, who is not surprised by the number of new construction underway in Macomb and Shelby townships.
RE / MAX data for September shows Macomb County experienced the largest median price increase in southeast Michigan.
“It has become a very popular place to live and work and it’s obvious,” she said.
As for Jeff and Mandy, they couldn’t be happier.
They were lucky to have their house built in less than a year, but their first Thanksgiving was shared on a nesting table as it was still somewhere on a boat.
“We’re excited,” Mandy said.
Their children, including Zack, 17, Ethan, 15, Brynnlee, 11, and Lexie, 8, all have new bedrooms and more than enough space to spread out and enjoy their new home. either with their family or the friends they invite.
“We came here several times during construction,” Mandy said. “Every little change was a big deal. One day it’s the windows, another day you walk past and the porch is finished.
A large porch with enough room for a bench and pumpkins in the fall and changes to the roof elevation were among the significant upgrades for the couple and although these were additional costs they moved into the home they were looking for at the start of their journey.
“I wanted her to like the look of our house when you parked in the driveway and so do I,” Mandy said.
What was important to Jeff was having space to relax. In their old house, they tripped over each other. Now he can enjoy his time at home, with his family and their dog, Shiloh, or on his own.
“I wake up in the morning and before I go to work I have my coffee and sit in my chair,” he said, looking up to a leather rocking chair in one of the three living rooms.
“I don’t have much time but I light the fireplace and relax for a few minutes,” said the police inspector. “It was really cool.”
Oakland Press staff writer Mark Cavitt contributed to this report.