Ann Arbor-area home builders see new construction rise this fall

What that means for Haeussler and his Saline-based business is “it allows us to keep our core people employed and cover our overhead, which is necessary to keep an ongoing business,” he said.

That’s important in a market where home construction is a fraction of what it was just a few years ago.

According to regional data from SEMCOG, construction totals for single family homes in Washtenaw County through October totaled 116, with 64 of those in June or later. About a dozen are by Peters Building.

Those numbers are off peak years like 2004, when 1,775 homes were built. And they’re also off from 2008, when 243 were built.

But it’s still welcome in a year when uncertainty dominated much of the state’s economy.

“(The building totals) are what we figured we’d do, but it started late in the year,” Haeussler said. “We weren’t going to make it the way it was going.”

Traction in the market during the second half of the year reflects more than activity from the federal first-time buyer tax credit, Haeussler said.

It’s also payback on some strategy shifts, like building smaller homes at lower price points.

That, he said, puts some of his new products “within reasonably close range of foreclosures that are in good condition."

“We’re trying to narrow that gap.”

Rob Ewing, a Realtor at the Charles Reinhart Co., also saw more activity in new construction in recent months.

Discounts on lots are anywhere from 25 percent to 50 percent off of recent years, he said, which is fueling a lot of the interest. So are other components of lower prices on new homes, such as supply costs - and labor.

“Builders are working on tighter margins to have the work,” Ewing said. “… There are good values to be had.”

A percentage of buyers will always want new construction, he said.

And in the last year, speculative construction became a rarity in Washtenaw County, since neither banks nor builders want to sink cash into a home with no committed buyer.

So the activity this year also signals builders and banks are holding less existing inventory - giving both the flexibility to shift gears on size and cost, like Haeussler did.

New construction is ready to benefit from what appears to be price stabilization in Ann Arbor, said Kevin Belew of Norfolk Development Co.

The city’s core neighborhoods influence sales in outlying areas, he said, due to price and availability. With neighborhoods like Burns Park experiencing fewer listings and relative price stability, buyers in outlying areas - especially west of Ann Arbor - can be more confident about buying new construction.

“All of this process is starting,” Belew said.

The building activity is also a hopeful sign for owners living in some of the communities.

In Haeussler’s Dexter Crossing, for example, six of his recent sales left 58 unbuilt lots in the 223-home neighborhood. The pace of activity won't fill the sub quickly, but it keeps it from becoming stagnant.

The sales also benefit Haeussler and other builders holding loans on land and lots. He has 240 lots in active projects in nine subdivisions in the county.

And his activity this year may hit half of the 30 sales he’d generate in what he describes as a “good year.”

That ratio beats the regional building trends.

And the prices, he said, benefit buyers.

“They’re getting a brand-new home with the warranty … for 5-10 percent over what they can buy a comparable distressed home for,” he said. “They get the home they want and the neighborhood they want.”

Paula Gardner is Business Director of AnnArbor.com, where she covers real estate and development. Contact her at (734) 623-2586 or by email. Follow her on Twitter.