Danny Veri, owner of Livonia Builders, is building homes in The Woodlands of Arbor Ridge development in Pittsfield Township.

Angela Cesare | AnnArbor.com

Although the number of new homes under construction is still low by historical standards, Ann Arbor area builders say they’re noticing a gradual increase in demand. “The new housing market definitely bottomed out, but we’re on a bit of an incline,” said Danny Veri, owner of Livonia Builders. “I think it’s going to be a good year.”

Washtenaw County permits for single-family home construction totaled 241 in 2010, up 53 percent from 2009.

In the first four months of 2011, 51 permits were filed, up 34 percent from the same months in 2009.

“The economy is coming back and we’re getting more people moving into the area,” said Maureen Sloan, CEO of the Builders & Remodelers Association of Greater Ann Arbor. “We’re seeing positive job growth in the area right now and people want new construction.”

To be sure, new home construction is nothing like it was in 2005 — and a steady stream of foreclosures present competition for new homes.

Builders submitted 1,167 permit applications in 2005, according to regional housing data compiled by the Southeast Michigan Council of Governments. By 2009, that number was just 158, the lowest level of the decade.

“People were staying put,” Sloan said. “They weren’t selling or looking for new houses.”

Robert Denk, Senior Economist for the National Association of Home Builders, cited Michigan’s loss of population, high unemployment rates and the foreclosure crisis for the reasons behind the decreased new home construction rates.

Also, the average sale price for an existing home in Washtenaw County is nearly half that of a new home, according to a sales report by the Ann Arbor Board of Realtors. In April 2011, the average price for an existing home was $171,593, while a new home averaged $303,825.

With less new homes being constructed during that period, Washtenaw County construction jobs fell from 5,500 in 2007 to a projected 3,055 in 2011, according to an economic forecast conducted by the University of Michigan.

However, local homebuilders said there might be a reason to be optimistic about the new housing market in Washtenaw County. Sloan said she expects somewhat of a “housing comeback” in 2011.

Long-time local homebuilder Jack Campbell attributes the slow uptick in new home construction market to an improved economy and an interest in the Ann Arbor region.

Campbell, managing partner of the Marhofer/Campbell Building Company, is currently developing three “spec” homes in the Dexter area in the hopes that he will find a buyer. “Spec” homes are constructed when a builder hasn’t yet secured a buyer but has enough faith in the housing market to start building without a buyer.

Campbell said his company used to do a lot of spec building and subdivision development when the economy was better. He said he “sat on the sidelines” during the recession, but he has recently seen more interest in new construction.

“I found that last year I had Realtors calling me asking what properties I had up because they had an interested buyer,” Campbell said. “We figured, if we don’t have something on our shelves, we don’t have something to sell, so this year we’re going to start some specs.”

Campbell, who sells homes in the range of $300,000, said buyers seem to be willing to pay higher prices for new homes than during the recession.

As a strategy for selling homes in a tough market, Campbell said he is making homes Energy Star-certified and including more features, such as granite countertops.

“We’re seeing stuff sell in the threes, especially for a custom house,” Campbell said.

Campbell said the Dexter market in particular is seeing an increase in new home construction. Sloan agreed and said Dexter is a “growing community that has available lots.” Ann Arbor, Saline and Chelsea are also showing encouraging signs, Sloan said.

Livonia Builders owner Veri, who is working on projects in Saline and Pittsfield Township, said all of Washtenaw County seems promising.

“I think anything in Washtenaw County is doing strongly,” Veri said.

Pittsfield Township, where Veri is building in The Woodlands of Arbor Ridge development, has had the most residential building permits filed for Washtenaw County in recent years, according to regional housing data.

The township accounts for 26 of the 51 permits filed in 2011. Ann Arbor trails Pittsfield in second, with seven permits filed this year. Regionally, Pittsfield Township ranks in the top 10 Southeast Michigan communities with the most residential building permits in 2011.

According to national data, this optimism in Washtenaw County may be reflective of recent trends across the country. In April, the Commerce Department’s U.S. Census Bureau released data showing new housing units increased 11.2 percent in March, exceeding private-sector expectations.

The National Association of Home Builders website also anticipates growth in the housing market.

“Housing market conditions are improving with housing affordability at its best in a generation and household formation rates beginning to thaw from the deep freeze induced by the recession,” NAHB Chief Economist David Crowe said in a statement.

Local homebuilder Jim Haeussler, owner of Peters Building Co., said that although the housing market is slowly improving, he is approaching this data cautiously.

“There is more volume than there was during the lowest point, but it has come back just a little bit,” Haeussler said. “It seems to be trending in the correct direction, which is up.”

Haeussler is working on residential developments in Ann Arbor, Saline and Dexter. He said he is getting more traffic and inquiries into his developments this year.

“Things are still at a very reduced level from what they used to be, but at least we’re seeing some consistent inquiries. You never know from day-to-day, but I sure feel more encouraged than I have in the past few years,” Haeussler said.

Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at or 734-623-2584 or at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.