Kalamazoo Housing Market Mixed

Published: Thursday, December 16, 2010, 1:40 PM
Updated: Thursday, December 16, 2010, 1:48 PM

By Olivia Pulsinelli | Business Review West Michigan

Although the housing market is not recovering as quickly as anyone would have hoped, Kalamazoo area brokers and builders have an optimistic outlook for 2011.


The Greater Kalamazoo Association of Realtors today released its monthly report for November, which included "somewhat encouraging housing news." With 260 units sold, November was up slightly from October's 252, but the association reported 184 fewer units sold year-to-date compared to the same time last year. And last month had 20 percent fewer units sold compared to November 2009.

The average selling price — $132,957 — was up slightly from October, and the total dollar volume was up 3.5 percent from November 2009.


“It is a welcome sight to see housing gains in units sold, average selling price, and total dollar volume in the greater Kalamazoo real estate market,” GKAR CEO Frank Mortl said in the report. “However, activity needs to improve further to reach healthy, sustainable levels.


"The local housing market is clearly in a recovery phase and will be uneven at times, but improving job conditions and the consequential boost to household formation will help the recovery process going into 2011.”

The past year was better than 2009 in many respects, though the market experienced a number of ups and downs throughout 2010.

“If there was ever a classic definition of ‘mixed-bag,’ it was 2010 housing in Kalamazoo,” Mortl said last week.

The year started solidly and improved in major metrics — homes sold, price and overall averages — then “the numbers fell off a cliff” once the first-time homebuyer tax credits expired June 30, Mortl said. Prices, however, have managed to stabilize in the second half of the year.

The average selling price in October 2010 was $132,502 — 13 percent higher than in October 2009. The relatively quick stabilization of prices was a pleasant surprise for Mortl and his association.

“As you look back historically, a lot of the indicators early on for a healthier housing market begin with price,” he said. “Once you’re able to stabilize the price numbers, that then triggers many other positive effects within the housing community. We’ve seen that. We’re just waiting now for that next progression.”


The year also was mixed for the Home Builders Association of Kalamazoo, Executive Vice President Dale Shugars said. Through the first three quarters of 2010, Kalamazoo County had 195 single-family home starts, compared to 247 for the same period in 2009.

“It’s a little bit better than that once you go out to some of the other communities,” Shugars said. “So it’s about the same as last year when you look at apartments and condominium starts and duplexes with it.”

The housing market still is facing many challenges, including strict lending regulations and continued high unemployment.

Another factor is uncertainty in Washington, which is creating uncertainty at the business level, Shugars said. But he’s hopeful that consumer confidence might be picking up a little.

“Apparently the retail sector is doing very well this Christmas season” early reports indicate, Shugars said. “If some of the things get straightened out in Washington, it could jumpstart a little bit of a recovery.”

Shugars and Mortl are seeing positive indicators locally, as well.

Interest rates are still at record lows, and materials prices are extremely low, as well, making it a good time to buy or build a home for those who can get a loan.

“Housing affordability is 60 percent higher than it was during the housing boom,” Mortl said.

Shugars saw increased entries and attendance at the parades of homes in Grand Rapids and Kalamazoo this year. He is getting a great response for exhibitors for the Home Expo 2011, which is in March in Portage.

“There’s no trends yet, but there’s a little bit of optimism because phone calls are starting to come to the builders asking for some quotes and estimates and that type of thing for new construction,” Shugars said. “So that’s something that’s probably better this year than it was last year.”