Economic Outlook: 'Washtenaw County is a bright spot' in the midst of a recovery, industry experts say
With unemployment rates dropping, auto sales on the uptick and businesses ready to expand in Washtenaw County, the area is on its way toward economic recovery.
Photo from loopnet.com
That’s the message from Bill Lichwalla and Cam McCausland of Plante Moran CRESA and Michael Finney of the Michigan Economic Development Corporation, who provided insight into the local and state economy at a Washtenaw Contractors Association meeting Wednesday morning.
Lichwalla and McCausland of Plante Moran CRESA - a Southfield-based real estate consulting firm - said that since the real estate bubble burst in 2008, the local market is now showing signs of improvement.
Among the changes: “We’re getting new equity, the economy is improving and we are going to see some rent appreciation, and banks are starting to get back to lending at some historic levels,” Lichwalla said.
He added: “Washtenaw County is a bright spot and the market has already picked up considerably.”
One factor that’s helping the Washtenaw County market rebound - particularly in Ann Arbor - is that the real estate market was never overbuilt, McCausland said.
“The market size dictates recovery. There has always been relatively slow growth [in Ann Arbor] at least we didn’t have a huge amount of inventory to deal with,” he said.
To be sure, the Washtenaw County real estate market still faces challenges moving forward, with Lichwalla predicting that the “debt hangover” will persist until 2017 - the time it will take to clear underwater properties from the market and stabilize lease rates.
But for the first time in years, Lichwalla said, many companies are now eyeing expansion in the area thanks to improved economic factors and falling unemployment rates.
“Companies need more space because they’re doing as well as they’ve done in a long time,” he said. “We’ll see that drive the empty space.”
And a lack of newer, attractive office buildings in Washtenaw County will help drive construction of “large blocks of Class A space,” including new spec developments, Lichwalla predicted.
MEDC CEO Finney agreed that things are looking positive on a local and statewide level.
He said that because Michigan is “a state that makes things,” the state is in a position to influence the national economy.
With auto sales “looking positive,” and Gov. Rick Snyder’s tax reforms in place, Finney is encouraged about the area.
Two of the state’s highest priorities right now: Keeping talent in Michigan and helping businesses get access to capital.
“We are doing things to really help build that entrepreneurial culture,” Finney said.
He acknowledged a “talent gap” in the state - something Snyder recently addressed - and said both attracting businesses and keeping youth in Michigan is critical.
“We need to create vibrant, urban environments where young people want to live,” he said.
But he said certain initiatives - such as Live Work Detroit - are already helping to make Michigan's urban cities more attractive to young people.
“Some of it is starting to happen,” he said. “Young people are clamoring to live in and around that downtown area of Detroit.”
He added: “Michigan is in a great spot for the first time in a long time.”