Abayomi Azikiwe, editor of the Pan-African News Wire, covering a demonstration against the Mortgage Bankers Association Annual Policy Summit in Washington, DC on April 16, 2008. (Photo: Alan Pollock).
Originally uploaded by Pan-African News Wire File Photos
Residential permits drop by 80%, but nonresidential projects show an 8% increase
Catherine Jun
The Detroit News
Residential building in southeast Michigan fell for a third year in 2007, dropping by as much as 48 percent -- a record low in home construction since the early 1980s, according to data released by the Southeast Michigan Council of Governments this week.
And if it wasn't for nonresidential construction holding steady, the state's economy would be a lot worse, the data shows.
"It's mostly institutions, retail, and hospitals that's keeping it going," said Janet Mocadlo, planning analyst for SEMCOG.
With another year of sputtering home construction in 2007, the region logged an 80 percent drop in new housing permits since the housing boom in 2004, which was primarily fueled by low interest rates.
The data was compiled from the seven-county region, which comprises Wayne, Oakland, Macomb, Livingston, Monroe, St. Clair, and Washtenaw.
Canton Township, once a pacesetter in the region in housing construction, with an average of 1,000 permits annually, logged only 68 last year.
"It was like somebody turned off the faucet," said Tom Yack, township supervisor.
Luckily, the construction of box stores and industrial centers on Michigan Avenue is thriving, he said.
"We've got enough in the pipeline to keep our folks busy for the next two years," he said.
While the housing market sputtered, expansions of hotels, hospitals and other commercial ventures has boosted nonresidential construction in the region, which logged an 8 percent increase in 2007 from the previous year.
Leading the area in terms of square footage was Wayne County -- with the new north terminal at the Detroit Metropolitan Airport and Detroit's refurbished casinos -- and Oakland County with the expansion at Henry Ford Health System in West Bloomfield and St. John's medical campus in Novi.
"We're still the economic engine of the state," said Maureen Krause, Oakland County's deputy director of economic development and community affairs.
The regional data also shows that for a third year, Detroit's loft development makes it the regional leader in residential building, which could echo a national migration back to urban living among younger homebuyers.
"It's going to take a long time for Detroit to turn into a Chicago or New York City, but I think people are becoming more interested in stopping sprawl and preserving green space," Mocadlo said.
You can reach Catherine Jun at (248) 647-7429 or cjun@detnews.com.
Thursday, May 15, 2008
Survey: Home builders' outlook remains dismal
Associated Press
WASHINGTON -- A reading of U.S. homebuilders' sentiment scraped bottom in May, coming in just one point above its lowest level ever as anxiety continued to grip the industry.
The National Association of Home Builders said Thursday its housing market index came in at 19 this month, after holding steady at 20 from February through April.
It was the second-lowest reading for the index, which goes back to 1985. The record low of 18 was set last December.
May's reading for the index had been expected to rise to 21, according to the consensus forecast of Wall Street economists surveyed by Thomson/IFR.
The index is derived from a survey of about 400 residential developers nationwide. It gauges builders' perceptions of current conditions, interest from potential buyers and expectations for home sales over the next six months. Index readings higher than 50 indicate positive sentiment.
The index hasn't broken the 20-point mark since last September. It's been below 50 since May 2006.
Tighter lending standards, rising defaults and fear about the housing market's future have sidelined buyers, an absence felt acutely by homebuilders such as D.R. Horton Inc., Pulte Homes Inc. and Centex Corp.
Confidence fell across the country, expect in the West, where confidence rose three points and has been trending upward since January.
The segment of the index that tracks current sales conditions dropped to its lowest-ever level, while expectations of sales for the next six months and traffic from prospective buyers also dropped.
Despite numerous efforts by the Federal Reserve to shore up the housing sector "the housing market has shown no evidence of improvement thus far," the group's chief economist, David Seiders, said in a statement. "Conditions have continued to deteriorate."
The trade group has been urging Congress to put a tax credit for home buyers in a housing package. The credit, Seiders said, is the brake needed to "halt the housing downswing and remove the heavy drag" of housing on the economy.
Thursday, May 15, 2008
State jobless rate drops
Analysts say figures represent a loss of 15,000 people who stopped seeking work.
Brian J. O'Connor
The Detroit News
Construction jobs in Michigan's hard-hit building sector dropped during April by the biggest amount in more than a year, even though the state's total employment level declined for the third consecutive month.
The adjusted unemployment rate for April dropped three-tenths of a percentage point to 6.9 percent. But data from the Michigan Department of Labor & Economic Growth shows that lower rate didn't come from more people getting jobs, but from 15,000 workers dropping out of the state labor force.
"It wasn't due to any increase in employment," said Bruce Weaver, an economic analyst with the department. "It was due to fewer people in the job market seeking employment."
The total number of seasonally adjusted Michigan payroll jobs fell in April by 19,000 to a total 4.2 million.
Construction jobs fell by 7,000 in the month, and manufacturing jobs declined by 11,000, mostly because of strike-related layoffs in the auto industry.
Jobs in trade, transportation and utilities dropped by 3,000, along with 2,000 fewer workers in and leisure and hospitality services. Gains were seen in professional and business services, which were up 3,000, and government units added 3,000 jobs.
"Manufacturing jobs in the state continued to drop in April primarily due to the impact of the ongoing labor dispute in the auto sector," said Rick Waclawek, director of the department's Bureau of Labor Market Information and Strategic Initiatives. "A relatively large reduction in construction employment in April added to the overall monthly drop in Michigan payroll jobs."
The April 2008 jobless rate is two-tenths of a percentage point lower than last April's rate of 7.1 percent. During the same time, the national jobless rate rose by half of a percentage point.
Over the past 12 months, payroll jobs in Michigan fell by 72,000 or 1.7 percent. The biggest losses came in manufacturing, which lost 53,000 jobs; construction, which lost 13,000 jobs, and government work, which reduced payrolls by 8,000 employees. Meanwhile, education and health services added 9,000 jobs, and professional and business services added 4,000 positions, the only major sectors in Michigan to report job growth.
Despite the April decline, the 6.9 percent jobless rate in Michigan's so-called "one-state recession" continues to outpace the national jobless rate, which declined by one-tenth of a percentage point, to an even 5 percent.
You can reach Brian O'Connor at (313) 222-2145 or boconnor@detnews.com.
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