I read all of the articles about this Federal agency or that making predictions about how things are getting better (or at least that they hope that they will soon). I also get the NAR cheerleading news - "really the dust on the horizon is the cavalry and not more Indians." But what I really look for are local signs that things are changing for the better.
I'm starting to see a few local indications that things might be better in 2011. We had 11 local new-build developments in my home township going into the recession, some very small and a few fairly ambitious. All 11 developments stalled out during the recession. In some cases the developers and builders went bankrupt and exited the business. People in those projects are in a form of real estate and legal limbo, since most are site condo projects with not enough finished development to form a HOA to take over from the developer.
It will also be interesting to see how the courts resolve some of the issues that were created in Michigan by the use of site condo rules for developments. When those went bust, some were eventually sold off parcel by parcel by the banks that took over from the developer. One has to wonder what happened (or will happen) with the condo association responsibilities that the original developer assumed had for the development. Who owes (or will owe) what for the maintenance and insurance of the common areas, which in most of these developments includes the roads? We'll see how that plays out in the coming years.
Recently, however, I've noted that at least two of these developments are building new units/homes again. Two out of the eleven might not sound very impressive, but these developments have all been stalled for at least three to four years; so, any activity is a very positive sign. The developments that have restarted appear to be run by developer/builders who were smart enough to shut things down quickly as the economy tanked and positioned well enough financially to ride out the worst of the downturn. They are local people who turned to home improvement project business to tide them over during the long drought of new building.
I haven't visited any of the newly started homes yet to see if any are being built on spec or whether they are all bespoken homes. It will also be interesting to see the size and content of these homes, which are what would be classified as "move-up" homes, not starter homes. There has been much written about builders moving a bit downscale to accommodate the reduced buying power of their potential clients. I would not be surprised to se a little less square footage and less upscale content.
Still, it is good to see anyone building anything these days. I would assume that there is also pent up demand for smaller start-up or retirement homes that will result in new developments for those, too. We have to have a place for all of the Boomers to downsize into soon; and we'll need places soon for all of those people who were displaced by foreclosure on their McMansions.
For now, it's time to find hope and some joy in the re-emergence of a few local builder/developers and the few new-build starts that are popping up locally.
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