Construction Resurgence in Saline Bodes Well for Local Economy
After home construction in the area came to a near standstill in 2007, new houses are once again going up. This increase is expected to continue and is good news for the local economy.
From Legacy Heights to Huntington Woods, from Harwood Farms to Hidden Creek Estates, builders are once again active in the Saline area. Where lots sat empty houses are now rising.
In Pittsfield Township alone, 98 permits for new houses were issued in 2012 with a total value exceeding $19 million. New construction is also happening in other surrounding townships and in Saline itself.
But it was not always this way. After robust development in the early years of the 21st century, new construction came almost to a standstill in 2007.
“I think the first problem to really hit Ann Arbor was the Pfizer pullout, said Lewis Johnson of Johnson Building Group. The pharmaceutical company was the largest private employer in the city when it left in 2007, taking with it 2,100 jobs.
“So that just created an awful lot of inventory and it took a long time to absorb it," Johnson said. "Then you had the autos and then the financial sector, so it was just a triple whammy that way.”
The affects of the Pfizer pullout combined with the problems of the auto industry and the great recession of 2008 hit the Saline area in a big way. Legacy Heights, on the north edge of Saline, had all the roads and infrastructure completed but had just begun building houses. The new neighborhood remained very sparse until this year.
"It was tough,” said Jim Haeussler a manager of Development Services Group, who developed the plat. Haeussler, also president of Peters Building Company, survived several very lean years.
Other area developers and builders also went through hard times.
“More developers probably went out of business than stayed in business,” said Brian Brickley of Guenther Building Company. “Fortunately the Guenther family is diversified enough and owns apartment buildings and office buildings. Well obviously we downsized the company considerably, but there was never any concern about shutting the lights off or anything.”
Others were not so fortunate. Before the crash, Steve Willison, a young builder in the area purchased 33 acres of land east of Saline for development. Willison, whose father and grandfather had also been builders in southeast Michigan, loved home design and construction. The dearth of new construction motivated him to leave the state and take up nursing.
However, the situation that halted home construction is changing. Haeussler says there are several reasons for this.
People who had postponed buying a new home until they could sell their old one are now able to sell for a more reasonable price. Others are moving into the area for employment by the university and technology companies. Still others are looking to upsize or downsize and cannot wait any longer.
“The market has bottomed and prices are showing increases in most local markets,” said Sue Rushlow of Reinhart Realtors. “The inventory of homes for sale and the time it takes to sell has returned to normal levels.”
Rushlow also said that new home sales are expected to increase another 50 percent in 2013.
Builders have begun building spec houses again and they are selling.
“As things improved, as they have now, they pretty much sell before they are completed,” said Brickley. “It’s pretty rare now that we [Guenther] have a home, especially in Saline, that sits around completely done waiting for a buyer,”
The upturn of the construction industry is a stimulus for the local economy as a whole.
“I do think we are turning the corner and I do think the economy is starting to rebound,” said Saline mayor-elect Brian Marl. “That’s what I hope for. That’s what I wish for, but we won’t begin to see the residual effects of that at the municipal level for the next couple of years.”