Traverse City Record-Eagle

October 20, 2013

Area builders optimistic

BY GLENN PUIT gpuit@record-eagle.com
Traverse City Record-Eagle

---- — TRAVERSE CITY — A strong rebound in the building sector so far in 2013 could breath new life into Grand Traverse County's jobs market.

The number of building permits issued by Grand Traverse County spiked in the first nine months of 2013, and prompted demand for skilled construction labor in the region not seen since before the economic downturn, builders say.

"This year, I would say, the economy turned," said Gary Jurkovich, owner of Pathway Homes. "There is a huge amount of pent-up demand."

Grand Traverse County issued 683 building permits from January to September. That's a 26 percent jump from last year, when 542 were issued during the same period. More striking is the fact that the value of construction projects took a huge leap forward. The estimated cost of those building projects was $50.4 million in 2012. This year, the estimated value of construction bounced to $90.2 million — a 79 percent jump.

Trends are similar in Garfield Township, which has its own building department. In 2012 the township issued 163 permits with an estimated value of $25.7 million. Nearly two months remain on the calendar, and the township has issued 140 building permits worth about $34.2 million.

"The statistics from within the county are pretty powerful," said Kathy Maisonville, executive officer of the Homebuilders Association Grand Traverse Area Inc., which covers Antrim, Benzie, Leelanau, Grand Traverse and Kalkaska counties.

Compared to 2009, the building permit statistics are downright explosive. There were 111 single-family home starts through the third quarter that year. In Grand Traverse County through the third quarter of this year there were 232 — a 109 percent jump.

"Many have finally begun to understand that this is the new normal," said Maisonville. "The interest rates are low. Things have bottomed out. There is some light at the end of the tunnel. The purse strings have been loosened. We are seeing remodeling jobs and new construction at a level we've not seen in the last five years."

The economic impact of new construction is significant. The Housing Policy Department of the National Association of Home Builders estimates the one-year local impact of building 100 single-family homes in a typical metro area offers $21.1 million in local income and provides for $2.2 million in taxes and 324 local jobs.

Jurkovich said the new construction trend is undeniable. And he points to his increasingly in-demand construction company as evidence. The custom home builder expects to have 75 permits for the year. That's nearly double the 44 it applied for in 2012, 35 in 2011 and 18 in 2010.

"The beginning of the year and the last part of last year, the repo market evaporated in town," said Jurkovich. "As the inventory of repo houses came off the market, people still wanted to buy a home. All of a sudden (the market) just switched.

"We’ve gone from six employees to 26 employees," Jurkovich said. "Its been huge and they (the new jobs) have come in the form of management, project managers, sales people and labor to keep up with the demand."

Kimberly Pontius, executive officer for the Traverse Area Association of Realtors, said the strong trend in construction starts in northern Michigan is good news.

"We saw it coming," Pontius said. "In the last two years we’ve seen a marked increase in vacant land (sales), both waterfront and non-waterfront parcels. We've also seen an absorption of land lots in subdivisions that had kind of gone dormant. I think it's mostly prospective homeowners or people who are buying a spot who want to build their home someday down the road."