June 19, 2025 • 48 mins
Tariffs, housing attainability and affordability, labor force, legislation and regulation all impact builders and the new construction segment of the real estate market. This episode dives into all these factors and more along with a review of the popular annual Parade of Homes event.
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Episode Transcript
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Speaker 1 (00:00):
You are listening to the Remax real Estate Insights Show
where you get real talk by real agents. Walk to
you by REMACS of Southeastern Michigan. Welcome to the Remax
Real Estate Insights Podcast. We're happy you're joining us today.
I'm your host Janete Schneider. Today we're taking a closer
look at the new construction side of the housing market.
(00:20):
Right now, we have tariff uncertainty, We're watching unemployment. There's
legislation and regulations and all of this can combine to
put pressure on builders. And what is this pressure showing
when it comes to single fam homely permits. Add to this,
we've got some stubborn mortgage interest rates and affordability concerns
from potential buyers. So that gives us, honestly, quite a
(00:42):
bit to discuss today. Also, June is Parade of Home
Month here in Southeastern Michigan, and we're going to talk
about what you need to know about this popular annual
event with me today as Forest Wall. He is the
CEO of the home Builder Association of Southeastern Michigan and
Forrest welcome. It's great to have you with us again today.
Speaker 2 (01:02):
Thanks Tonette, so happy to be here with you.
Speaker 1 (01:04):
I called June Forest Month because usually usually we have
him here because we've got a lot to discuss mid
year and pray to home month. Well, I've been starting
off every show this year asking our guest kind of
how they landed where they're at today. So could you
kind of give us a little bit about what brought
to you?
Speaker 2 (01:21):
Oh? Sure, Yeah. So I actually did not start in
real estate. I was more of an association guy up
in Lancing and started really in the in the government
affairs side, working in Lancing for another trade association. Ended
up there was an opening here at the Homebuilders Association
of Southeastern Michigan and came here twenty seven years ago.
Speaker 1 (01:43):
A couple of days ago, right, Yeah, yep.
Speaker 2 (01:45):
So it's and it's it's been great. You know. I
joke that it's just it's the hardest working industry that
you can find, and I and and but it's in
a way it just it reflects so much of the
American dream that our members are building, right, but they
work in that way, and it just so it's been
(02:06):
a great industry to work for and good people, very
very good people. We've been very blessed at the Homebuilders
Association to have some outstanding long term members, but long
term leaders. You know, our Board of Directors, our executive committee.
On our executive committee are those who come on our
executive committee to eventually become president make a ten year
commitment to do that significant. That's a that shows just
(02:30):
how committed some of these individuals are. They've been great
leaders over the years, and so we're very blessed in
that respect.
Speaker 1 (02:36):
Well, in great organizations, that doesn't happen by accident, right,
I mean you do, like you said, you need good
people at all levels, but especially those willing to put
the time in the effort in serving leadership roles because
without that you can't have that continuity. Right.
Speaker 2 (02:48):
As staff, we can only do so much, and we're
also very blessed to have some very long term staff members.
That's been I think one of the great stabilizing factors
for our organization during the good times and the bad
time times. However, those volunteer leaders are just so crucial
and so important to the success long term success of
the association. We're actually now headed towards our hundredth anniversary,
(03:10):
will be here in a few years, so we've been
around a long time.
Speaker 1 (03:13):
I'm sensing there's a celebration in the ware will.
Speaker 2 (03:15):
Yeah, absolutely, there is going to be a celebration, a
year long celebration.
Speaker 1 (03:18):
I think, well that's worth it. Anything that can get
to one hundred years deserves to be celebrated. So, like
I said in the intro, there's a lot of things
you know, impacting influencing your industry, are my industry kind
of our industries together. But to kick things off, I
know you just hosted a mid year economic forecast, and
can you share for those that weren't in attendance, can
(03:38):
you maybe sure some highlights, some things that you took away?
Speaker 2 (03:41):
Sure? I mean, so each year our organization puts on
actually two economic forecasts. After the Great Recession, our board
of directors said, hey, we really need to do this
a couple of times a year to keep us informed
because things change so rapidly. And so each year in
the summer, we partner with the Construction Association of Michigan,
which is our same association, only they represent the commercial
(04:01):
industrial builders. So we partner with them with on a
June event, we bring in an economist. One of our
favorites is doctor Elliot Eisenberg, who many listening to this
may not know who he is, but he's he's literally
one of the most entertaining economists you will ever find.
I know that sounds like an oxya.
Speaker 1 (04:18):
I'm second, I ben to your economic I wasn't there
this year, but I've been before, and I love him.
He can make it humorous and fun and entertaining.
Speaker 2 (04:25):
It's it's great information, but it's delivered in such a
way that it keeps everybody in a funny way. So
a few of the takeaways. I mean, you know, he
was still positive on home building, although permits are down
this year. I think that's related. You mentioned the word earlier, uncertainty.
There's been a lot of talk on tariffs and just
uncertainty in the in the macroeconomic sense, fundamentals of home
(04:49):
building are still very strong. I mean, the demographics are
are great for our industry, but that uncertainty has led
to a pullback in permits not only in southeastern Michigan,
but but nationwide. And we do seat or see that
as part of his forecast is that you know, we're
we're gonna be a little less than we were last year. However,
the economy is still very resilient, and the tariffs themselves,
(05:10):
although they will have an impact on on home building,
like a lot of other industries to a certain extent.
You know, it's they're they're really we look at the
broader economy, you know, the job market and and a
lot of other metrics, and and the broader economy is
still very very strong, and so uh, he does not
foresee a recession at this point, although you know that
(05:31):
still could prove. He does foresee the FED cutting rates
a couple of times later this year, which which might
be helpful to our industry. But you know, ultimately it's
it's really going to be about builders being cautious managing
their businesses in this environment. Given that uncertainty, and given
(05:53):
the given the level of you know, a little bit
more inventory in the existing homes for sale market, builders
just need to be a little bit more cautious in
this environment. Business.
Speaker 1 (06:02):
They learned a lot of important lessons back during the
Great Recession, and I can completely respect that. Nobody wants
to put themselves in a position of being vulnerable, you know,
and and overextending themselves. And it is interesting because you know,
this year, our spring was very lackluster, you know, February March,
I mean, home sales down year over year they were
(06:23):
down the year before. You know, we're really getting a
sense that, yes, there's a little bit more inventory coming
to market, you know, some places that's sitting a little longer.
I mean, relatively speaking, still a seller's market, but a
little bit different. But like you, I've kind of read
and heard, you know, maybe interest rates coming down closer
to six percent as we get to the latter part
(06:43):
of the year. I think psychologically that will do a
lot to get buyers back out there moving again.
Speaker 2 (06:48):
I do too, And you and I talked about this
actually last year. You know, when you when you look
at at rates currently, and you and I have been
around long enough to know this is not a this
is a more neutral type of interest rate. It's not
it's not it's not awful and so but we had
over ten years of these ultra low rates, and that
(07:10):
takes time for the psychology of that within the public
to change. Yes, and I think that change has been
happening slowly. But I did see a study from Bank
of America the other day that that said that seventy
five percent of prospective home buyers are waiting still to
see interest rates come down. So that's that it takes time.
(07:32):
If it's time for that, that understanding, I think you're right.
As rates come down a little bit further, I think
you're going to see an unleashing of potential home buyers
that are going to come off those sidelines. You thinks.
Speaker 1 (07:42):
I think so. I mean because psychologically, when you know
rates you know, kind of started to pop closer to seven,
you know, then you have people starting to put up
a you know WHOA don't know if this is for
me if we get closer to six, you know, I
think I had read once that five point eight five
is like the perfect rate. If it got down to there,
it would just bring everybody and their brother off the fence.
Don't think we're going to see that this year, but
(08:02):
if it, if it moves well, you brought up something
that I did have on my list, was that permits,
because that's one of the markers that we take a
look at. And I think that if there was a positive,
it was that April April permits were up over March.
A blip seasonal seality thing. You know, what do you
think that hopefully not a blip?
Speaker 2 (08:19):
Yeah, I think I think it's it's it's partially a
seasonality issue, although we we do foresee I think I
think things stabilizing. We were the same as you just mentioned,
you know, the first first few months of the year,
we're definitely down year over year. But I think things
have stabilized and and so I do foresee the spring
season being being okay. I don't know that it's going
(08:41):
to be a one of those really robust years, but
we have been getting, you know, good reports from our
members saying that that yes, April and even into many
things were you know, things have been going well. Yeah,
like I said, not not gangbusters, but but you know,
it's it's it's okay on.
Speaker 1 (08:59):
We have to take it for what it is given
given all the outside factors everybody's dealing with. Absolutely, speaking
of outside factors, there's these larger economic pressures that you
know always impact you know, new home construction one of them,
well a couple of them. You've got mortgage interest rates,
We've got employment in vehicle production. Because I know you
(09:20):
track all of these things, So what are you seeing
in the tea leaves? Because as I looked at the
most recent report, I wasn't necessarily seeing a lot of
things popping out saying, hey, this is good news, good news,
good news on these fronts, maybe interest rates, but talk
to me a little bit more about the others that you.
Speaker 2 (09:33):
Right, I mean, we you know, we track a number
of things in our forecast. They include North American vehicle
production because obviously in southeastern Michigan this is still a
very important metric. It may not be as important in
other markets in other parts of the country, but here
it is very important. Included in that too, is is
oil prices.
Speaker 1 (09:50):
Yep.
Speaker 2 (09:51):
So people always ask the question like, well, what are
you guys tracking oil prices? Sounds odd for us to
be tracking that with with respect to housing, but it
is important, part, part and a metric in southeastern Michigan,
and so we track that along with you know, employment statistics,
existing home sales, a number of other things. And so
again I think that for us, the the we've seen
(10:15):
those metrics kind of fluctuate a little bit. The you know,
oil prices have you know, stabilized. The North American vehicle
production is actually not all that bad. Part of that
maybe some people, you know, they're they're pulling some things
forward because of all the tariff talk, not only sales
but also production. So there are some there's some uncertainty
there as to where that's going to go. Our forecast
(10:36):
only goes out a few months because beyond that it
gets very very difficult. But it shows a leveling off
pretty much, and and you know as a you know,
decline year over year, but but a leveling off in
terms of permits.
Speaker 1 (10:48):
And then from the unemployment side of things, are you
seeing anything there that's a concern or are you? I mean,
it's just kind of like, okay, a little bit of movement.
Speaker 2 (10:56):
Not we haven't seen anything that's overly concerning. And again,
the the employment picture, when you you know, are as
our economist said that our economy is is really resilient.
And when you look at the inflation metrics and things
along those lines which the FED looks at and it
looks at employment levels, there's nothing there that that would
that would indicate an alarm should go off.
Speaker 1 (11:18):
Good. Well, but that's always good to you, right, I mean,
because a couple of times after a while, you know,
Michigan's certain numbers are starting to come up a little
bit more over you know, national, and I'm like you,
I didn't see anything that would tell me this is
something that I really really need to keep an eye
on at this point. But you just, you know, I
always like to ask other experts what they what they think. Well,
the one thing we haven't thrown on the table yet,
(11:38):
and it's you know, it's kind of like the word
of the year next to uncertainty is tariff yep. Word
of the year is it gets all sorts of cross
it gets all sorts of attention. How is that impacting
in a real way versus like just the psychology of
what's going on?
Speaker 2 (11:54):
Well, well, certainly, and it's it is difficult with the
kind of the back and worth with the administration on well,
we're going to institute the tariffs and tariffs and then
then certain tariffs get pulled back and others go forward,
and so it's been very hard for our members to forecast. However,
you know, we haven't seen you know, too much of
(12:16):
a difference at this point because that pricing still is
it takes time for that to build in. What we
do know from a home building perspective, one of the
key concerns is lumber. We get a significant amount of
lumber from Canada, about a little under thirty percent of
our supply. The administration initially said we're going to increase
(12:36):
tariffs on all Canadian products, and included in that is lumber.
Then lumber was exempted. However, the Commerce Department came back
and informed us that in the fall there is no
change it's or there is no stopping the change in tariffs.
It will go from fourteen point five percent up to
thirty four percent. So that is a significant increase. So
(12:59):
that has not that those prices haven't changed yet, but
they will over time. That will be something that will
build into the you know, the price of a home,
and it is a significant factor. I mean, you think
about thirty percent of the supply of something. And the
National Association home Builders has worked very hard to impress
upon you know, multiple administrations that that you know, we
(13:20):
need this supply of labor and if you're talking about
attainable housing, this goes goes right. And so if we
want to foster attainable housing, these tariffs are not the
best idea. I do think that that you'll start to see,
you know, some of the major producers will will will
try to do more in the United States. But ultimately
what you need to do is is open up more
(13:41):
federal lands to logging, which there's not a whole lot
of support in the environmental community for that back and
forth there, right, So so that's I guess that's that's
one thing. You know, we we're concerned about a variety
of issues with the tariffs. You know, think that the
steel and aluminum prices for example, you know, a lot
of things unum utilized, a lot of things in appliances
(14:02):
and so forth. So that's something to look at. You know,
gypsum from Mexico.
Speaker 1 (14:09):
I mean literally I can drive off from Canada.
Speaker 2 (14:11):
Yeah, those are all things that that are going to
ultimately get embedded in the price of a home because
when you look at from a home builder's perspective, I
mean you mentioned it, interest rates are are headwind still
at this point. Labor continues to be a headwind, although
that situation is maybe getting a little bit better, but
but there's still a high cost of labor. Materials are
(14:34):
a significant cost there. And then the fourth one is
really you know, regulation, government regulation, and so those materials
costs and and so I think you see it reflected
in different ways with with with a builder. You know,
they're trying to plan for some of these but but
ultimately it's very difficult because there's just been so much
uncertainty in terms of that.
Speaker 1 (14:53):
Yeah, I mean, it'd be one thing whether you agree
or disagree with the thought of, you know, tear off
either have them or you don't, or you raise it
by this. But like you said, the kind of game
of well, it's on, it's off, it's on, but I'm
going to exclude and then we're going to give a
nine to day for this. I can't even imagine somebody
trying to keep the extel spreadsheet of what's going on.
Speaker 2 (15:12):
That was that was one of the key points of
the economists we just had in Doctor Eisenberg was Listen,
the economy is resilient, and we actually you know from
from the perspective of the tariffs, if you're going to
do it, do it. But this back and forth is
what's rattling the markets. It's what's rattling pricing it. You
just either need to do something or stop and figure
(15:35):
it out. It's that uncertainty is what's causing a lot
of the problem.
Speaker 1 (15:39):
So, I mean, we've talked about Canada, we've talked about Mexico.
Obviously close proximity neighbors, you know, as far as where
these supply comms. And then we know I'm not a
politician by any stretch, but it seems China is kind
of in the cross hairs of all of this, of
all of this tariff conversation, and we learned during COVID
ships and other things coming out of China can have
(16:01):
a real impact on things. How big of a concern
do you have, like from you know, we talked a
little bit about lumber and gypsum. What about China what
they contribute?
Speaker 2 (16:08):
Well, certainly, I mean you look at appliances and whether
it's parts, whether it's it's you know, full appliance, those
types of things. We we we definitely have have concerns
there with what's going to happen with pricing. Another good example,
you know, during during the pandemic, we saw shortages of
transformers and that that caused a real problem for our
(16:29):
developers who were trying to energize neighborhoods. Right, and so
are our utilities. Thankfully have gotten better at sourcing those things,
but you know, they started sourcing some of those from
from the Far East, and so there there's you know
a lot of different products and different components that go
into a house and and where they where those parts
come from. It's all over the world, and so you know,
(16:51):
whether it's China, whether it's Canada, or it's I mean,
you know it's it's going to have an impact. Well.
Speaker 1 (16:55):
And in all of that, and then I think I
had also read that the US construction material producer price index,
you know, had been on the rise since September. And
now you add all this and that was last fall
before on the tariff talks, and now you've got all
this pressure and uncertainty is there and there probably necessarily
isn't a solution to this, but you know, are there
alternative materials that can be used that could either lower
(17:17):
costs or it could be a substitution for.
Speaker 2 (17:20):
Not really I mean you need these materials. Yeah, And
I think that, you know, the the auto industry has
been you know, kind of out front with these tariffs
and talking about, Okay, we understand you want to bring
more production to the United States, but this takes time.
It takes it takes years to build factories and to
to change production. Home building industry is not not all
(17:41):
that different from a lumber perspective. Yes, we could do more,
but we need more federal lands, We need more sawmills
production there. That takes time, it takes years. So in
the short run, no, I mean you really you need
to source most of these things from where you're sourcing
them now and for our home building economy to continue
to produce and continue to meet the needs of the public.
(18:04):
You know, unfortunately, some of those prices are probably.
Speaker 1 (18:07):
Going to happen it up now, and you may or
may not know the answer to this. I'm just I'm
curious because I think historically there's probably been pretty good
relationships specifically between the US and Canada. I think that
has obviously changed in the last several months, at least
from the political side of things. You know, are your
folks finding like a difference of attitude towards Canadian suppliers
towards towards US or are they okay?
Speaker 2 (18:27):
No, that we have not heard anything along those lines.
And as a matter of fact, the Canadian government, as
you might expect over the years, was very much aligned
with the National Associational home Builders to try and end
the tariffs on Canadian software numbers. So no, those relationships
have been solid and we don't foresee.
Speaker 1 (18:46):
That too good. Well, we're talking with Forrest Wall he's
the CEO of the Homebuilders Association of Southeastern Michigan. And
you mentioned that there's some head winds in a variety
of different things that we've covered to some degree, but
the one we haven't dug into yet is regular correct
and that can and that I think is probably one
that not necessarily a lot of people have in their
(19:06):
cross hereers or maybe are as aware of. But there
are some things, certainly on the state level, that you
guys are are watching and taking a look at.
Speaker 2 (19:14):
Yeah, And when I mentioned before, some of those headwinds
and some of the big costs that are members. You know,
according to National Association Homebuilder study, now twenty four percent
of the price of a new home is in regulation.
When you when you let that sink in, it's a
lot of money. It's a lot of money. And and
you know, one of the great things is we are
having more conversations about housing attainability and we need more supply.
(19:38):
But ultimately regulation is is something that is a huge
cost in the industry and it's and unfortunately so much
of it happens before you even think a shovel.
Speaker 1 (19:49):
Yeah, yeah, and you don't get any control of yeah.
Speaker 2 (19:52):
Right, And so that can be frustrating for our members,
and so we try to bring that that information forth
to the public so that they have a or understanding
of it. One of the those key regulations is that
we deal with our codes, and so that's one of
the big headwinds that we're seeing. It's it's actually been
brewing for a few years now. And not to go
too far into the code world, because it gets confusing.
(20:16):
People's eyes roll back in their head when you start
talking about it. But the code one oh one is
every three years, a new model code is developed by
the International Code Council. There are a private organization made
up mostly of building officials and others who who continually
are looking at our building codes. They developed those model codes,
they send them into the states and local governments to
(20:38):
use as they see fit. Here in Michigan, we have
a single state building code, so all local governments have
to adhere to the same code, which provides a lot
of efficiencies. Unfortunately, you know, we're in a code cycle.
The State of Michigan, which which is tasked with going
forward with a code update, has been focused on the
twenty twenty one model code. That code was promulgated with
(21:02):
a lot of controversy, especially surrounding the energy code portion,
which I think insulation, all the things that go into
energy efficiency in your home. So much so that after
that code was finished, the International Code Counsole changed the
entire way that they developed the energy code portion of it.
So they knew they had a problem. It was flawed,
(21:22):
and so they changed.
Speaker 1 (21:23):
It try to fix it.
Speaker 2 (21:24):
And so the state of Michigan unfortunately has gone forward
with adopting the twenty twenty one code. Many other states
have decided to pass for a number of reasons. That
energy code portion is very expensive. It drives up the
cost of the homes significantly. Our studies show that the
cost of an average production home two story, a couple
(21:47):
thousand square feet anywhere from twelve to fifteen thousand dollars
additional cost over and above our existing code versus this.
And the problem is that the payback on that takes
a long time decades is not going to see that back.
For example, the take attic installation from our thirty eight
(22:09):
around here up to our sixty. You then have bracing
issues that you have to account for. The payback period
on that change is ninety to one hundred years. So
this code does not make sense. It's expensive, and unfortunately,
the administration has gone forward with it despite the fact
that the twenty twenty four model code is now available.
Speaker 1 (22:30):
So we can use something else.
Speaker 2 (22:31):
And that's the point that our State home Builders Association
has made is we support the twenty twenty four code.
The energy code portion of it provides builders with more
trade offs. They're trying to meet certain energy efficiency scores,
so it allows them to make better decisions based on
the size of the house, what the consumer wants, you know,
(22:52):
all of those factors. And while it will increase cost
to a certain extent, it's it's not as it's not
as rigid. It allows them to do what they do
for the consumer. And so unfortunately, the state of Michigan
has gone forward with the twenty twenty one code unbelievably,
and so we're we're probably going to be filing a
(23:13):
lawsuit to try and block that code, which unfortunately a lawsuit,
you know, all it does is is it is it right? Yeah?
And and you know, the people of the state of
Michigan we want updated codes. As an industry. It's it's
it's about life safety, it's about you know, new innovations
in the building process, and and the building officials locally
(23:36):
they want the latest code. They don't want a code
that's already outdated. So I think it's it's it's unfortunate
that the state has has taken this path. And but
we're going to do what's best for you know, the
public and for the home buyers and defend them through lawsuit. Unfortunately.
Speaker 1 (23:54):
I mean, and and you know that is that is
the system that we have, you know, when when all
not I want to say, when all else fails. But
that is a path, you know, to be heard, you know,
to get something out there. And I think it's worth
having the conversation because I guess I'm scratching my head
even if I'm an official in the administration here in
Michigan that you know is really green, really wants these
you know, the perceived efficiencies. You know that that twenty
(24:16):
twenty one code can give if you have the twenty
twenty four And every other time you've kind of rolled forward.
Because I agree with you. Technologies change. You know what
you know about products change. You know what real life
experience when you put something in a house, you learn
things over time. It would just seem to me twenty
one's now in the rear view mirror. We have something new.
I don't understand the beholding to that.
Speaker 2 (24:38):
We don't understand the logic there either, but but it
is what it is, and so we're going to, as
I said, we're going to defend you know, the home
buying public. The great thing I will say in Lansing
right now is despite the code issues in the state legislature,
there's a lot of conversation about housing attainability. And that's
a good thing. And sometimes those opinions differ as to
(25:01):
what we need to do. I think there there is
a consensus though around listen, we need more supply. We
need to have a conversation about you know, local zoning
and local regulation, generally state regulation and even to to
a lesser degree, federal regulation. Regulation. Although that's you know,
that can't be something that state legislature really deals with.
(25:23):
But it's it's good that that conversation is happening, and
it's you know, housing is and should be always bipartisan.
It shouldn't it shouldn't be a partisan subject. You know.
What we're trying to do is provide shelter for people.
Speaker 1 (25:36):
And at the end of the day, Like you said,
there may be different thoughts and opinions and how we
get to some things, but that should be an issue
that everybody can roll up their sleeve. Because he said
attainability is key. Because we both know that there's been
a shortage of homes for the number of people you
know out there that we want to have a roof
over their head, there's an issue there. Affordability has also
become an issue for a variety for you know, scarcity
(25:57):
on the existing home sales side. It pushed prices up,
you know, interest rates, availability of new construction homes. You know,
all of this has kind of created an attainability and
an affordability issue.
Speaker 2 (26:08):
Absolutely, yeah, and so it's it's something that we're you know,
we're deeply involved in as an organization. I mean, we
try to you know, we always try to keep the
best interest of the home buyers in mind, right, That's
that's our our key goal is to create an environment
for the building industry to flourish and to meet the
needs of the public, not only here in southeastern Michigan,
(26:30):
but as a state and as a nation. You know,
the our state government readily acknowledges we have a significant
shortfall in housing in this state. There's a shortfall nationally.
So this isn't just a conversation in Michigan. It's happening
across the country.
Speaker 1 (26:45):
Yeah, it's one of the few times, I mean, because typically,
at least for as long as I've been in this industry,
there's a lot of times that the nation is kind
of doing one thing and Michigan was kind of doing
something else, you know, I mean, and it seems as
though right now there is a lot of nationality, you know,
to of the challenges that we're network.
Speaker 2 (27:01):
Absolutely, I mean, we're talking about a lot of these
same issues that the code is is a you know,
is a great example we talk about that not only
on a local and state level, but but on a
national level too. Permitting, you know, those types of things, inspections,
all those things that that take time and uh and
how can we best as as you know, as an
(27:24):
industry and as governmental officials, streamline that to the best
degree possible while still in it, you know, ensuring the
safety of the building process. I mean, ultimately we need inspections, right,
we need.
Speaker 1 (27:36):
Those inspections and balances, check and balance.
Speaker 2 (27:39):
But how can we do those things more efficient.
Speaker 1 (27:40):
Well, and it's funny because you were saying that, you know,
code can make people's eyes roll back. My husband happens
to be an architects, so I do hear about I
do know a little, I mean enough to be dangerous
about codes because I hear about it from a from
another perspective is as well well, kind of switching gears
just a little bit. There always tends to be some
popular trends when it comes to new home is that
I think, you know, even current homeowners, existing homeowners look
(28:02):
to new construction to kind of see what's coming. What
don't I have in my house? You know that other
people like to put in theirs. What are you kind
of seeing right now? Are there some trends that you're
you're seeing from the field?
Speaker 2 (28:13):
Yeah, so definitely some trends. I mean, you know, what
we've seen the last few years is a trend towards functionality,
you know, having rooms that are multifunctional. And part of that,
I think is, you know, we've seen some declines in
home size as prices have continued to go up. One way,
you do, well, the homes a little smaller, so having
(28:34):
that functionality built into rooms so that they can double
as a workspace and as a play space or a
workout space or whatever you may do. So that functionality,
I think the other couple of the other trends, I
mean on high end homes, what we've heard from some
of our designers that you know, sculleries having that that
kitchen behind the kitchen, so people really are focused on
(28:55):
having the larger kitchen space be their show space.
Speaker 1 (28:59):
Entertainment's eating a spot.
Speaker 2 (29:01):
Kind of behind there where where you can put the
blender and you can put the toaster and drop mail
and have a space. So on some of the higher
end homes, we're seeing that we're seeing.
Speaker 1 (29:11):
Everything all that is new again. Go through historic homes,
that's what.
Speaker 2 (29:14):
They had back in the day, dueling primaries, you know,
having that and that trend we've even seen on mid
priced housing, you know, which accounts for people thinking about
you know, having their parents and maybe longer stays or
you know, those types of things. We definitely have seen
this evolution of the indoor outdoor transition spaces right like,
(29:37):
and it started with COVID right everybody kind of went
outside and realized, oh my gosh, this is great. And
so those transitions from where you're going from the inside
to the outside, bringing more natural light to the inside,
maybe more and higher end features to the outside, little kitchens. Definitely.
Covered covered outdoor spaces is a huge thing, and we've
(29:59):
seen that with our with our home shows, which is
another one of our public outlets. You know, the number
of people that are coming through looking for you know,
those covered spaces, and so that's been an interesting trend too.
Speaker 1 (30:10):
And it's funny because I went and reversed the house
that we lived at in Northville had I mean, it
was just kind of like, you know, the overhang but
had three skylights in it, you know. I mean, but
it's so light through onto the deck. But you know,
a light rain you could still you could still still
be outside. And that, honestly, I will say that was
one of the features when we looked at the house,
we both because it happened to be a light, rainy
(30:31):
day when we did. I'm like, this is perfect. I
could still sit out here and read, you know, but
I don't have to be forest indoors. New house doesn't
have that, and that is the one thing I do miss. Yeah,
I love the new house, but that is one feature
absolutely that Yeah, I would bring back.
Speaker 2 (30:45):
If I those are the things we've seen.
Speaker 1 (30:47):
All right, Well, we're talking with Forest while he is
the CEO of the Homebuilders Association of Southeastern Michigan. Let's
talk a little bit about timeline. I know we're past COVID.
You know, when we had COVID and there were you know,
material delays and other things like that, the timeline to
get a new home built kind of expanded a little bit.
How how are things going on that front?
Speaker 2 (31:06):
Much better?
Speaker 1 (31:07):
Good?
Speaker 2 (31:07):
I mean a lot of the things that I mentioned
transformers as an example. You know that that situation has
cleared up, thankfully, and you know, we don't really have
the supply chain challenges of before. You know, typically like
a production home, you know, six months is probably the
expectation somewhere in that in that range. Obviously, custom homes
more customized. It gets the longer that timeframe probably gets
(31:29):
because you're you know, you're you're making decisions along the
way and maybe making changes along the way. But you know,
six months and up.
Speaker 1 (31:36):
It's funny you mentioned, you know, customers, we've got I
believe I'm sure a custom one being built a few
doors down from us. And then there's one kind of
a cross and over. It has been interesting to see
how slow the progression has got. And and that's that's
what we've been saying, is like, are these people making
changes and what they're doing is I don't really think
it's a material it's delay at this probably not.
Speaker 2 (31:55):
I mean, there's there are there are still issues. Obviously,
labor availability is still an ise shoe to to a
lesser degree now than I think it was a few
years ago even, but there really shouldn't be too much
in the way of the materials, you know, type of
of a situation.
Speaker 1 (32:11):
Well that it is interesting and I know, Likeki Cruise
are spreads. Then they show up, you know, for a
couple hours one day here, and then you don't see
them for a few days. They're just trying they're trying
to keep everybody happy. Yeah, I get how how that works.
I know there's been kind of a push, you know
for younger people getting into the trades. You know, are
you seeing fruits from from those efforts?
Speaker 2 (32:30):
We absolutely are. I mean we're we're definitely seeing the
growth in in young people going into the trades, but
also the growth in some of the trade schools that
are available. For example, we work really closely with with
the Southeastern Michigan Construction Academy SEMCA. They just opened a
new facility down in Westland and they're filling it with
young people who are coming for carpentry and electrical training.
(32:53):
So we are seeing that. What's been really nice is
to see that re emergence of the trade in in
high schools. I think you're you've seen a real change
in the last few years with some of the counselors
in looking at the construction trades as a career path
and trade schools, and you're seeing a revitalization even within
(33:16):
the school districts of you know, bringing back welcoming yeah,
you know, those those classes and having trade schools internally
because that is an investment. But I think understanding that
that it's a very worthy path and and and it
you know, obviously the cost of going to college, especially
for your university, has had a lot to do with
(33:38):
that too. I think it's it's it's been a natural
driver for people to look for alternatives to go to
college because college is not for everybody. It's it's it's
While it is a very worthy pursuit, it's also a
very worthy pursuit to to go into the trades.
Speaker 1 (33:53):
Absolutely, And I think I might have shared last year
my nephew went into welding and he's got his welding
certificate and now he's got a job he's doing now.
I think like the union program, you know, where he's
going through and stuff like that. And he had several
of his friends that you know, went into various different
you know, career paths like that because college wasn't going
to be for him. He's very intelligent. I could believe
(34:14):
he could do anything he wanted to in college. He
just doesn't want to sit in a class.
Speaker 2 (34:16):
Absolutely. Yeah, it just wasn't right for him. And you know,
I've said consistently that the labor issue is a generational issue.
It's not something we were going to fix in one
year or five years or even ten years. But we
are making I think some significant progress. You know, our
organization has tried to support through our foundation, support young
people with scholarships to try and encourage it. But a
(34:39):
big part of what we've done, both locally on a
state level and on a national level, has have this
conversation so that we get a mindset change within the
schools so that they really do start to see that value,
and I think that's that has definitely taken hold well.
Speaker 1 (34:54):
I mean, and obviously the skilled trade is so needed,
you know, for you know, for your industry and then
as as an individ visual homeowner having moved into a new,
newer home that needed some work done. It's like we
were calling all electricians and plumbers and you know, all
of those and you know, lucky enough that we our
realtor had good connections where they would come out relatively quick,
you know, but you always need the people.
Speaker 2 (35:15):
With that skill set. People with those skills.
Speaker 1 (35:17):
Yeah, they're I don't think AI is going to replace.
Speaker 2 (35:20):
We'll probably not there yet. Nope. There are some things
efficiency wise that we have that we have seen along
the way with you know, but ultimately you need somebody
to come to the house to make the repairs or
in a new construction environment to come and you can
you know, you can build some components off site, but
you you ultimately need people where you are doing that.
(35:42):
I'm sure that quality Well.
Speaker 1 (35:43):
I brought up AI because that's I mean, tariff says
the word of the year, uncertainty. But AI is not
far behind, you know, as far as getting people's attention
this year. Are you seeing it creep into your world
or do you see it creeping into I mean, we.
Speaker 2 (35:56):
We have I don't want to say we've seen it
creep into much. I mean, ultimately a lot of our
business is still driven by, you know, that human aspect. However,
I think you do see it in the parts of
the process, whether that be through the architectural and through
the design process, how our members do their everyday business,
(36:17):
and utilizing AI to make things operations within their office
more efficient. So we do see it on those levels.
But you know, the building process in a lot of
ways is still still is. I mean, it's still very
hands on.
Speaker 1 (36:32):
Which is good. So robot's not coming to my house,
probably not had a new roof put on this year,
and I know it was a crew that actually was
there that day, about twelve of them.
Speaker 2 (36:41):
But they can use a lot of technology to help
them isolate, especially when you look at roofs, you know,
utilizing drone technology and utilizing some of those sorts of things.
So technology is definitely being utilized more, but you still
need that human element.
Speaker 1 (36:54):
Well, if we have somebody that is interested in new construction,
whether they're just on the front end of thinking about it,
June is a great month because it is Parade of
Parada Homes month, and this is kind of your your month,
this is your event. And if I'm not mistaken, this
is the thirty sixth annual event. So how are things
going this year?
Speaker 2 (37:12):
They're going great. So the Parade of Homes is one
of the most significant public outreach efforts of the Homebuilders
Association of Southeastern Michigan. And as an organization that represents
you know, builders and remodelers and developers, this program is
is a is a key way for us to showcase
the breadth and depth of the industry here in Southeastern Michigan.
(37:32):
And so, you know, it's a it's a The best
part of all is it's free for the for the public.
But it's it's a you know, it's it's a way
for us to showcase those those model and inventory homes
that are available throughout Southeastern Michigan. It's you know, it's
it includes thirty two homes this year. It's you know,
it's available that there's a magazine that that we have
(37:54):
during the month of June that's available. It's available to
our partner at Lake Michigan Credit Union there there are
a key sponsor for this program.
Speaker 1 (38:00):
It's beautiful, like full color. Yeah, it's very very right.
Speaker 2 (38:02):
So there's there's that publication that goes out through the
Detroit newspapers as well, but ultimately, our our parade website
is available all year, so we highlight things in June,
and June is like a big month for us. But
you know, our our parade website at PARADEHBA dot com
is available all year, so it's a great way for
the public to be able to view, whether it's through
(38:23):
the publication or the you know, the website. You know,
those different home plans and the different availability of homes
and throughout southeastern Michigan. So work's really excited about the
month of Jim.
Speaker 1 (38:33):
Well, I think one of the things and I've asked
I'm sure I've asked you this before, but just for clarity,
because I think sometimes when we say, you know, new home,
some of the bigger, you know, custom homes come to mind,
but when we're talking new construction home, it can be
anything from a condo to the to the you know,
the big luxury so you're you're a vent in June
really does span price points and styles.
Speaker 2 (38:55):
Our members are great about participating in this and providing
us with a wide range of housing. So this year's parade,
from a price perspective, prices start at mid two hundreds
and they go all the way up to two point
five million, so you can see it's a pretty wide disparity.
But so so there's something there for everybody. Some of
those homes are we have I think nine that are
(39:17):
are kind of minium products, okay, And so there's there's
really a wide range of housing in a wide geographic
spread throughout southeastern Michigan. So yes, it's it really does
have something for it.
Speaker 1 (39:30):
Well in that mid two hundred I mean that's that's
below the median you know price you know for like
existing you know existing home. So that's a really good price.
Speaker 2 (39:37):
And that's oftentimes where those condo products come in is
because they they that's a way to help to address
this housing attainability issue and you know, provide something for
for you know, entry level buyers or even maybe you
know empty nesters that want to downsize.
Speaker 1 (39:52):
You're taking the words right out of my mouth, because
that's what I was going to ask you is do
you are you seeing condos increasing in where people are
looking more for.
Speaker 2 (40:00):
I think, yeah, and part of that is geographic and nature,
you know, and the sites that are available. But yes,
we I mean we we continue to see, uh, you know,
the definite viability in condo products, to attach condo.
Speaker 1 (40:12):
Products because I mean I think absolutely, I mean they're
great for you know, potentially first time buyers, you know,
something like that, but I think equally a good option
for like you said, empty nesters that maybe, like if
we could afford to put my mom in a condo,
I would because you know, the long care and maintenance
is getting to be a bit much and it's hard
for me remotely, you know, to take care of two yards.
Speaker 2 (40:30):
You have a lot of advantages there.
Speaker 1 (40:31):
Yeah, there's there's some nice advantages that can come along
with that. So give the give the web address again
one more time where people can go.
Speaker 2 (40:40):
Yes, it's it's PARADEHBA dot com and that as I mentioned,
it includes really all the interior exterior photos and renderings
of the homes that are in the parade, lots of
location information and it's it's fun too because we you know,
the builders will have and it's this is on the
website they have during the month of June their open
house parties that are a ton of fun. Those are
(41:02):
typically on the weekends, you know, and we do our
Sunshine Dance to keep keep the weather nice.
Speaker 1 (41:07):
It's like you got a really sunshine but a little
warmer this week end.
Speaker 2 (41:10):
It looks so. So those are great and fun events.
We have some giveaways on the website, hundred dollars, you know,
gift gift card giveaways, things like that. So we want
to make so free and gifts free, and I mean,
how can you go wrong here? Exactly? No, we want
to make this fun and it's it's a like I said,
it's a it's a great way for us to expose
to the public. You know, all the is available in
(41:31):
the housing industry in southeastern or Michigan right now.
Speaker 1 (41:34):
Well as we kind of you know, bring this conversation
to close. If somebody's out there listening and they're you know,
maybe they've been kind of considering, you know, new construction,
you know, things of that nature, what advice would you
have to someone that's you know, looking maybe to make
a move and they're not sure, you know, trying to
find something in the existing market, should I know, no,
new construction kind of give them some advice.
Speaker 2 (41:55):
Well, first of all, go like check out the freight
of homes that that can advise you to to a
great extent. I mean, it really does, and that is
a great way to begin, is to go to gread
HbA dot com and check things out. But it's also
I think it's about those relationships, you know, like anything else,
whether if you were gonna, you know, do a repair
on your house, you'd get a few estimates and you
(42:17):
talk to a few contractors. It's it's it's very similar.
You really need to to to do your research, you know,
figure it out, figure out what what those things are
that you want in a in a in a home.
Speaker 1 (42:27):
Yeah those needs versus wants, Yeah.
Speaker 2 (42:29):
Versus wants. Talk to builders, you know, go out and
talk to a few of them, get a better feel.
Do your research. You know you're gonna be able to
get an understanding of the quality of a builder. You know,
you can go on our website at builders dot org.
We list all of our builder members that are available there.
But it it is really about that research and figuring
(42:50):
out what it is that you want. You mentioned that
that back and forth between an existing home or or
potentially a new home and there there are qualities to both,
right and so you also, I think have to have
a firm understanding of what those time frames are going
to be. And that's that's talking with your builder. You know,
they'll they'll help to give you some of those expectations,
but also understanding that that the new building process can
(43:15):
sometimes have some roadblocks right where where you can't get
a permit because the local government has backed up for
a certain period of time, or there's there are things
that are out of the builder's control. But they can
help you, help walk you through you know what those
timeframes are, what to expect, and so it's you know,
it's it's a it's a great time one way or another,
whether you're you're buying an existing home or whether you're
(43:35):
you're you know, going to invest in a new home.
You know, it's it's the biggest investments that you're going
to make. And I know that sounds cliche, it's set
over and over again, but it's think you have to
keep that, you have to keep that in mind, that
you need to take the time to really figure out
what it is that you want, how you want it,
and where you want.
Speaker 1 (43:53):
It well and absolutely because it's it's you know, it's
an asset, but it's the asset you get to live in,
you know, unlike any other asset that you have. I mean,
and so it's always interesting to me that sometimes I know,
from my perspective, I think people spend more time picking
where to go to dinner or on vacation than they do,
like you said, doing the research of something that's this important.
(44:13):
And I mean maybe it's because we're comfortable making those decisions.
We feel like we're in control, you know somehow. But
it's like when it comes to this, I completely agree.
Is you know, go out there, this the event that
you're having right now is a wonderful opportunity to get
exposed to a variety of different builders kind of you know,
see get to know, ask questions. There's nothing that I mean,
there's nothing wrong with that.
Speaker 2 (44:31):
Yeah, And that's that's a great thing about our Parade
month is that it's it's it's a easy way to
go out, whether it's through the house parties or just
to go out when they're when the model is open,
you know, talk to the builder and there they're they're salespeople.
It's a no pressure environment, right, It's going to be fun.
They want you to see their products, sure, but they
also recognize that, you know, their product may not suit everybody.
(44:54):
So it's a great way through our through our parade
to be able to go out and experience the you know,
like I said before, the breadth and the depth of
the housing market.
Speaker 1 (45:01):
And and you guys make it really easy because it's
not always that easy. Like in more of the existing
you know world, you can go see homes, but you've
got to schedule the showings, you know, and this, that
and the other thing. And you know this, especially during
the month of June. You make it. You couldn't make
it more easy for you know, folks, you.
Speaker 2 (45:16):
Want, we just we do suggest go to our website
at pradhba dot com because it because it will tell
you when those those open house parties are in the
hours and so forth.
Speaker 1 (45:25):
Well, of first, is there anything that we didn't cover
that was kind of on your mind that you wanted
to get across.
Speaker 2 (45:30):
To listeners about today? They cover a lot.
Speaker 1 (45:35):
We covered everything from tariffs to you know, uh, unemployment,
mortgage rates, government regulation. I guess I'm just going to
circle back to that real quick because I think the
regulation side of thing flies under the radar. Is there
anything that people listening could do to influence you know,
they're elected leaders in this or is it really more
(45:55):
coming from you know, your end and what you're going.
Speaker 2 (45:58):
To Well, I think, I mean, I think there's a
couple of things. Number one is is is you know,
if you're if you're talking to an elected official, whether
that elected official is somebody on a local level, on
a state level, whatever, you know, emphasizing the importance of
housing in our you know, our community, that it has
to be a wide range of housing. You know, we
(46:19):
need you know, we need our lawmakers to have difficult discussions.
But the second thing is is is if you're talking
with somebody to to make sure that you emphasize this
should not be a partisan issue. This is something that's
fundamental to not only the economic success of our nation,
but it's fundamental to our our well being as people
(46:42):
to have adequate shelter.
Speaker 1 (46:44):
Absolutely, I mean. And and to me, it seems as
we've gotten to a point politically where nobody wants to
give somebody else a win right instead instead of we
all hate, we can all take ownership of moving some
piece of legislation or you know, something forward. We can
all towut our check and say we did you know,
we did this. It just seems that that's missing, you know,
and it's a shame because, like you said, housing, there
(47:06):
are certain topics that should just transcend all of that
and I would think housing should be.
Speaker 2 (47:10):
At the top of the list that list.
Speaker 1 (47:12):
Yea, absolutely, absolutely, yeah, maybe you know, in safety would
be another one, but absolutely housing. Well, Forest Wall has
been with us today and he is the CEO from
the Homebuilders Association of Southeastern Michigan. It has been a
true pleasure. Haven't you here today?
Speaker 2 (47:27):
That's so much for having me. I appreciate it.
Speaker 1 (47:29):
Well, it's always nice to get insights from you know,
your industry and what's going on there. And I guess
one last time, as we're you know, as we're closing out,
I know you've got the prede HbA website. Was there
any other websites or anything else that you want to direct.
Speaker 2 (47:43):
People from general information? Our builders dot org is our
website for the Homebuilders Association of Southeastern Michigan. There's a
lot of information there too, but yes, pradhba dot com
is the key site right now for the month of June.
Will parade is on, so we hope people will go
check that out.
Speaker 1 (47:56):
And if you happen to be listening to the after June,
sorry you missed the event, but the all the other
information still holds true. You can you can still go
out there well. For us, thank you so much, and
to our listeners, thank you for joining us today. We're
always happy to have you with us and we look
forward to chatting with you again soon. We hope you
enjoy today's episode. Don't forget to subscribe, write a review,
(48:19):
or rate the show as it helps us reach more people.
You can also follow us on Facebook and Instagram.
You are listening to the Remax real Estate Insights Show
where you get real talk by real agents. Walk to
you by REMACS of Southeastern Michigan. Welcome to the Remax
Real Estate Insights Podcast. We're happy you're joining us today.
I'm your host Janete Schneider. Today we're taking a closer
look at the new construction side of the housing market.
(00:20):
Right now, we have tariff uncertainty, We're watching unemployment. There's
legislation and regulations and all of this can combine to
put pressure on builders. And what is this pressure showing
when it comes to single fam homely permits. Add to this,
we've got some stubborn mortgage interest rates and affordability concerns
from potential buyers. So that gives us, honestly, quite a
(00:42):
bit to discuss today. Also, June is Parade of Home
Month here in Southeastern Michigan, and we're going to talk
about what you need to know about this popular annual
event with me today as Forest Wall. He is the
CEO of the home Builder Association of Southeastern Michigan and
Forrest welcome. It's great to have you with us again today.
Speaker 2 (01:02):
Thanks Tonette, so happy to be here with you.
Speaker 1 (01:04):
I called June Forest Month because usually usually we have
him here because we've got a lot to discuss mid
year and pray to home month. Well, I've been starting
off every show this year asking our guest kind of
how they landed where they're at today. So could you
kind of give us a little bit about what brought
to you?
Speaker 2 (01:21):
Oh? Sure, Yeah. So I actually did not start in
real estate. I was more of an association guy up
in Lancing and started really in the in the government
affairs side, working in Lancing for another trade association. Ended
up there was an opening here at the Homebuilders Association
of Southeastern Michigan and came here twenty seven years ago.
Speaker 1 (01:43):
A couple of days ago, right, Yeah, yep.
Speaker 2 (01:45):
So it's and it's it's been great. You know. I
joke that it's just it's the hardest working industry that
you can find, and I and and but it's in
a way it just it reflects so much of the
American dream that our members are building, right, but they
work in that way, and it just so it's been
(02:06):
a great industry to work for and good people, very
very good people. We've been very blessed at the Homebuilders
Association to have some outstanding long term members, but long
term leaders. You know, our Board of Directors, our executive committee.
On our executive committee are those who come on our
executive committee to eventually become president make a ten year
commitment to do that significant. That's a that shows just
(02:30):
how committed some of these individuals are. They've been great
leaders over the years, and so we're very blessed in
that respect.
Speaker 1 (02:36):
Well, in great organizations, that doesn't happen by accident, right,
I mean you do, like you said, you need good
people at all levels, but especially those willing to put
the time in the effort in serving leadership roles because
without that you can't have that continuity. Right.
Speaker 2 (02:48):
As staff, we can only do so much, and we're
also very blessed to have some very long term staff members.
That's been I think one of the great stabilizing factors
for our organization during the good times and the bad
time times. However, those volunteer leaders are just so crucial
and so important to the success long term success of
the association. We're actually now headed towards our hundredth anniversary,
(03:10):
will be here in a few years, so we've been
around a long time.
Speaker 1 (03:13):
I'm sensing there's a celebration in the ware will.
Speaker 2 (03:15):
Yeah, absolutely, there is going to be a celebration, a
year long celebration.
Speaker 1 (03:18):
I think, well that's worth it. Anything that can get
to one hundred years deserves to be celebrated. So, like
I said in the intro, there's a lot of things
you know, impacting influencing your industry, are my industry kind
of our industries together. But to kick things off, I
know you just hosted a mid year economic forecast, and
can you share for those that weren't in attendance, can
(03:38):
you maybe sure some highlights, some things that you took away?
Speaker 2 (03:41):
Sure? I mean, so each year our organization puts on
actually two economic forecasts. After the Great Recession, our board
of directors said, hey, we really need to do this
a couple of times a year to keep us informed
because things change so rapidly. And so each year in
the summer, we partner with the Construction Association of Michigan,
which is our same association, only they represent the commercial
(04:01):
industrial builders. So we partner with them with on a
June event, we bring in an economist. One of our
favorites is doctor Elliot Eisenberg, who many listening to this
may not know who he is, but he's he's literally
one of the most entertaining economists you will ever find.
I know that sounds like an oxya.
Speaker 1 (04:18):
I'm second, I ben to your economic I wasn't there
this year, but I've been before, and I love him.
He can make it humorous and fun and entertaining.
Speaker 2 (04:25):
It's it's great information, but it's delivered in such a
way that it keeps everybody in a funny way. So
a few of the takeaways. I mean, you know, he
was still positive on home building, although permits are down
this year. I think that's related. You mentioned the word earlier, uncertainty.
There's been a lot of talk on tariffs and just
uncertainty in the in the macroeconomic sense, fundamentals of home
(04:49):
building are still very strong. I mean, the demographics are
are great for our industry, but that uncertainty has led
to a pullback in permits not only in southeastern Michigan,
but but nationwide. And we do seat or see that
as part of his forecast is that you know, we're
we're gonna be a little less than we were last year. However,
the economy is still very resilient, and the tariffs themselves,
(05:10):
although they will have an impact on on home building,
like a lot of other industries to a certain extent.
You know, it's they're they're really we look at the
broader economy, you know, the job market and and a
lot of other metrics, and and the broader economy is
still very very strong, and so uh, he does not
foresee a recession at this point, although you know that
(05:31):
still could prove. He does foresee the FED cutting rates
a couple of times later this year, which which might
be helpful to our industry. But you know, ultimately it's
it's really going to be about builders being cautious managing
their businesses in this environment. Given that uncertainty, and given
(05:53):
the given the level of you know, a little bit
more inventory in the existing homes for sale market, builders
just need to be a little bit more cautious in
this environment. Business.
Speaker 1 (06:02):
They learned a lot of important lessons back during the
Great Recession, and I can completely respect that. Nobody wants
to put themselves in a position of being vulnerable, you know,
and and overextending themselves. And it is interesting because you know,
this year, our spring was very lackluster, you know, February March,
I mean, home sales down year over year they were
(06:23):
down the year before. You know, we're really getting a
sense that, yes, there's a little bit more inventory coming
to market, you know, some places that's sitting a little longer.
I mean, relatively speaking, still a seller's market, but a
little bit different. But like you, I've kind of read
and heard, you know, maybe interest rates coming down closer
to six percent as we get to the latter part
(06:43):
of the year. I think psychologically that will do a
lot to get buyers back out there moving again.
Speaker 2 (06:48):
I do too, And you and I talked about this
actually last year. You know, when you when you look
at at rates currently, and you and I have been
around long enough to know this is not a this
is a more neutral type of interest rate. It's not
it's not it's not awful and so but we had
over ten years of these ultra low rates, and that
(07:10):
takes time for the psychology of that within the public
to change. Yes, and I think that change has been
happening slowly. But I did see a study from Bank
of America the other day that that said that seventy
five percent of prospective home buyers are waiting still to
see interest rates come down. So that's that it takes time.
(07:32):
If it's time for that, that understanding, I think you're right.
As rates come down a little bit further, I think
you're going to see an unleashing of potential home buyers
that are going to come off those sidelines. You thinks.
Speaker 1 (07:42):
I think so. I mean because psychologically, when you know
rates you know, kind of started to pop closer to seven,
you know, then you have people starting to put up
a you know WHOA don't know if this is for
me if we get closer to six, you know, I
think I had read once that five point eight five
is like the perfect rate. If it got down to there,
it would just bring everybody and their brother off the fence.
Don't think we're going to see that this year, but
(08:02):
if it, if it moves well, you brought up something
that I did have on my list, was that permits,
because that's one of the markers that we take a
look at. And I think that if there was a positive,
it was that April April permits were up over March.
A blip seasonal seality thing. You know, what do you
think that hopefully not a blip?
Speaker 2 (08:19):
Yeah, I think I think it's it's it's partially a
seasonality issue, although we we do foresee I think I
think things stabilizing. We were the same as you just mentioned,
you know, the first first few months of the year,
we're definitely down year over year. But I think things
have stabilized and and so I do foresee the spring
season being being okay. I don't know that it's going
(08:41):
to be a one of those really robust years, but
we have been getting, you know, good reports from our
members saying that that yes, April and even into many
things were you know, things have been going well. Yeah,
like I said, not not gangbusters, but but you know,
it's it's it's okay on.
Speaker 1 (08:59):
We have to take it for what it is given
given all the outside factors everybody's dealing with. Absolutely, speaking
of outside factors, there's these larger economic pressures that you
know always impact you know, new home construction one of them,
well a couple of them. You've got mortgage interest rates,
We've got employment in vehicle production. Because I know you
(09:20):
track all of these things, So what are you seeing
in the tea leaves? Because as I looked at the
most recent report, I wasn't necessarily seeing a lot of
things popping out saying, hey, this is good news, good news,
good news on these fronts, maybe interest rates, but talk
to me a little bit more about the others that you.
Speaker 2 (09:33):
Right, I mean, we you know, we track a number
of things in our forecast. They include North American vehicle
production because obviously in southeastern Michigan this is still a
very important metric. It may not be as important in
other markets in other parts of the country, but here
it is very important. Included in that too, is is
oil prices.
Speaker 1 (09:50):
Yep.
Speaker 2 (09:51):
So people always ask the question like, well, what are
you guys tracking oil prices? Sounds odd for us to
be tracking that with with respect to housing, but it
is important, part, part and a metric in southeastern Michigan,
and so we track that along with you know, employment statistics,
existing home sales, a number of other things. And so
again I think that for us, the the we've seen
(10:15):
those metrics kind of fluctuate a little bit. The you know,
oil prices have you know, stabilized. The North American vehicle
production is actually not all that bad. Part of that
maybe some people, you know, they're they're pulling some things
forward because of all the tariff talk, not only sales
but also production. So there are some there's some uncertainty
there as to where that's going to go. Our forecast
(10:36):
only goes out a few months because beyond that it
gets very very difficult. But it shows a leveling off
pretty much, and and you know as a you know,
decline year over year, but but a leveling off in
terms of permits.
Speaker 1 (10:48):
And then from the unemployment side of things, are you
seeing anything there that's a concern or are you? I mean,
it's just kind of like, okay, a little bit of movement.
Speaker 2 (10:56):
Not we haven't seen anything that's overly concerning. And again,
the the employment picture, when you you know, are as
our economist said that our economy is is really resilient.
And when you look at the inflation metrics and things
along those lines which the FED looks at and it
looks at employment levels, there's nothing there that that would
that would indicate an alarm should go off.
Speaker 1 (11:18):
Good. Well, but that's always good to you, right, I mean,
because a couple of times after a while, you know,
Michigan's certain numbers are starting to come up a little
bit more over you know, national, and I'm like you,
I didn't see anything that would tell me this is
something that I really really need to keep an eye
on at this point. But you just, you know, I
always like to ask other experts what they what they think. Well,
the one thing we haven't thrown on the table yet,
(11:38):
and it's you know, it's kind of like the word
of the year next to uncertainty is tariff yep. Word
of the year is it gets all sorts of cross
it gets all sorts of attention. How is that impacting
in a real way versus like just the psychology of
what's going on?
Speaker 2 (11:54):
Well, well, certainly, and it's it is difficult with the
kind of the back and worth with the administration on well,
we're going to institute the tariffs and tariffs and then
then certain tariffs get pulled back and others go forward,
and so it's been very hard for our members to forecast. However,
you know, we haven't seen you know, too much of
(12:16):
a difference at this point because that pricing still is
it takes time for that to build in. What we
do know from a home building perspective, one of the
key concerns is lumber. We get a significant amount of
lumber from Canada, about a little under thirty percent of
our supply. The administration initially said we're going to increase
(12:36):
tariffs on all Canadian products, and included in that is lumber.
Then lumber was exempted. However, the Commerce Department came back
and informed us that in the fall there is no
change it's or there is no stopping the change in tariffs.
It will go from fourteen point five percent up to
thirty four percent. So that is a significant increase. So
(12:59):
that has not that those prices haven't changed yet, but
they will over time. That will be something that will
build into the you know, the price of a home,
and it is a significant factor. I mean, you think
about thirty percent of the supply of something. And the
National Association home Builders has worked very hard to impress
upon you know, multiple administrations that that you know, we
(13:20):
need this supply of labor and if you're talking about
attainable housing, this goes goes right. And so if we
want to foster attainable housing, these tariffs are not the
best idea. I do think that that you'll start to see,
you know, some of the major producers will will will
try to do more in the United States. But ultimately
what you need to do is is open up more
(13:41):
federal lands to logging, which there's not a whole lot
of support in the environmental community for that back and
forth there, right, So so that's I guess that's that's
one thing. You know, we we're concerned about a variety
of issues with the tariffs. You know, think that the
steel and aluminum prices for example, you know, a lot
of things unum utilized, a lot of things in appliances
(14:02):
and so forth. So that's something to look at. You know,
gypsum from Mexico.
Speaker 1 (14:09):
I mean literally I can drive off from Canada.
Speaker 2 (14:11):
Yeah, those are all things that that are going to
ultimately get embedded in the price of a home because
when you look at from a home builder's perspective, I
mean you mentioned it, interest rates are are headwind still
at this point. Labor continues to be a headwind, although
that situation is maybe getting a little bit better, but
but there's still a high cost of labor. Materials are
(14:34):
a significant cost there. And then the fourth one is
really you know, regulation, government regulation, and so those materials
costs and and so I think you see it reflected
in different ways with with with a builder. You know,
they're trying to plan for some of these but but
ultimately it's very difficult because there's just been so much
uncertainty in terms of that.
Speaker 1 (14:53):
Yeah, I mean, it'd be one thing whether you agree
or disagree with the thought of, you know, tear off
either have them or you don't, or you raise it
by this. But like you said, the kind of game
of well, it's on, it's off, it's on, but I'm
going to exclude and then we're going to give a
nine to day for this. I can't even imagine somebody
trying to keep the extel spreadsheet of what's going on.
Speaker 2 (15:12):
That was that was one of the key points of
the economists we just had in Doctor Eisenberg was Listen,
the economy is resilient, and we actually you know from
from the perspective of the tariffs, if you're going to
do it, do it. But this back and forth is
what's rattling the markets. It's what's rattling pricing it. You
just either need to do something or stop and figure
(15:35):
it out. It's that uncertainty is what's causing a lot
of the problem.
Speaker 1 (15:39):
So, I mean, we've talked about Canada, we've talked about Mexico.
Obviously close proximity neighbors, you know, as far as where
these supply comms. And then we know I'm not a
politician by any stretch, but it seems China is kind
of in the cross hairs of all of this, of
all of this tariff conversation, and we learned during COVID
ships and other things coming out of China can have
(16:01):
a real impact on things. How big of a concern
do you have, like from you know, we talked a
little bit about lumber and gypsum. What about China what
they contribute?
Speaker 2 (16:08):
Well, certainly, I mean you look at appliances and whether
it's parts, whether it's it's you know, full appliance, those
types of things. We we we definitely have have concerns
there with what's going to happen with pricing. Another good example,
you know, during during the pandemic, we saw shortages of
transformers and that that caused a real problem for our
(16:29):
developers who were trying to energize neighborhoods. Right, and so
are our utilities. Thankfully have gotten better at sourcing those things,
but you know, they started sourcing some of those from
from the Far East, and so there there's you know
a lot of different products and different components that go
into a house and and where they where those parts
come from. It's all over the world, and so you know,
(16:51):
whether it's China, whether it's Canada, or it's I mean,
you know it's it's going to have an impact. Well.
Speaker 1 (16:55):
And in all of that, and then I think I
had also read that the US construction material producer price index,
you know, had been on the rise since September. And
now you add all this and that was last fall
before on the tariff talks, and now you've got all
this pressure and uncertainty is there and there probably necessarily
isn't a solution to this, but you know, are there
alternative materials that can be used that could either lower
(17:17):
costs or it could be a substitution for.
Speaker 2 (17:20):
Not really I mean you need these materials. Yeah, And
I think that, you know, the the auto industry has
been you know, kind of out front with these tariffs
and talking about, Okay, we understand you want to bring
more production to the United States, but this takes time.
It takes it takes years to build factories and to
to change production. Home building industry is not not all
(17:41):
that different from a lumber perspective. Yes, we could do more,
but we need more federal lands, We need more sawmills
production there. That takes time, it takes years. So in
the short run, no, I mean you really you need
to source most of these things from where you're sourcing
them now and for our home building economy to continue
to produce and continue to meet the needs of the public.
(18:04):
You know, unfortunately, some of those prices are probably.
Speaker 1 (18:07):
Going to happen it up now, and you may or
may not know the answer to this. I'm just I'm
curious because I think historically there's probably been pretty good
relationships specifically between the US and Canada. I think that
has obviously changed in the last several months, at least
from the political side of things. You know, are your
folks finding like a difference of attitude towards Canadian suppliers
towards towards US or are they okay?
Speaker 2 (18:27):
No, that we have not heard anything along those lines.
And as a matter of fact, the Canadian government, as
you might expect over the years, was very much aligned
with the National Associational home Builders to try and end
the tariffs on Canadian software numbers. So no, those relationships
have been solid and we don't foresee.
Speaker 1 (18:46):
That too good. Well, we're talking with Forrest Wall he's
the CEO of the Homebuilders Association of Southeastern Michigan. And
you mentioned that there's some head winds in a variety
of different things that we've covered to some degree, but
the one we haven't dug into yet is regular correct
and that can and that I think is probably one
that not necessarily a lot of people have in their
(19:06):
cross hereers or maybe are as aware of. But there
are some things, certainly on the state level, that you
guys are are watching and taking a look at.
Speaker 2 (19:14):
Yeah, And when I mentioned before, some of those headwinds
and some of the big costs that are members. You know,
according to National Association Homebuilder study, now twenty four percent
of the price of a new home is in regulation.
When you when you let that sink in, it's a
lot of money. It's a lot of money. And and
you know, one of the great things is we are
having more conversations about housing attainability and we need more supply.
(19:38):
But ultimately regulation is is something that is a huge
cost in the industry and it's and unfortunately so much
of it happens before you even think a shovel.
Speaker 1 (19:49):
Yeah, yeah, and you don't get any control of yeah.
Speaker 2 (19:52):
Right, And so that can be frustrating for our members,
and so we try to bring that that information forth
to the public so that they have a or understanding
of it. One of the those key regulations is that
we deal with our codes, and so that's one of
the big headwinds that we're seeing. It's it's actually been
brewing for a few years now. And not to go
too far into the code world, because it gets confusing.
(20:16):
People's eyes roll back in their head when you start
talking about it. But the code one oh one is
every three years, a new model code is developed by
the International Code Council. There are a private organization made
up mostly of building officials and others who who continually
are looking at our building codes. They developed those model codes,
they send them into the states and local governments to
(20:38):
use as they see fit. Here in Michigan, we have
a single state building code, so all local governments have
to adhere to the same code, which provides a lot
of efficiencies. Unfortunately, you know, we're in a code cycle.
The State of Michigan, which which is tasked with going
forward with a code update, has been focused on the
twenty twenty one model code. That code was promulgated with
(21:02):
a lot of controversy, especially surrounding the energy code portion,
which I think insulation, all the things that go into
energy efficiency in your home. So much so that after
that code was finished, the International Code Counsole changed the
entire way that they developed the energy code portion of it.
So they knew they had a problem. It was flawed,
(21:22):
and so they changed.
Speaker 1 (21:23):
It try to fix it.
Speaker 2 (21:24):
And so the state of Michigan unfortunately has gone forward
with adopting the twenty twenty one code. Many other states
have decided to pass for a number of reasons. That
energy code portion is very expensive. It drives up the
cost of the homes significantly. Our studies show that the
cost of an average production home two story, a couple
(21:47):
thousand square feet anywhere from twelve to fifteen thousand dollars
additional cost over and above our existing code versus this.
And the problem is that the payback on that takes
a long time decades is not going to see that back.
For example, the take attic installation from our thirty eight
(22:09):
around here up to our sixty. You then have bracing
issues that you have to account for. The payback period
on that change is ninety to one hundred years. So
this code does not make sense. It's expensive, and unfortunately,
the administration has gone forward with it despite the fact
that the twenty twenty four model code is now available.
Speaker 1 (22:30):
So we can use something else.
Speaker 2 (22:31):
And that's the point that our State home Builders Association
has made is we support the twenty twenty four code.
The energy code portion of it provides builders with more
trade offs. They're trying to meet certain energy efficiency scores,
so it allows them to make better decisions based on
the size of the house, what the consumer wants, you know,
(22:52):
all of those factors. And while it will increase cost
to a certain extent, it's it's not as it's not
as rigid. It allows them to do what they do
for the consumer. And so unfortunately, the state of Michigan
has gone forward with the twenty twenty one code unbelievably,
and so we're we're probably going to be filing a
(23:13):
lawsuit to try and block that code, which unfortunately a lawsuit,
you know, all it does is is it is it right? Yeah?
And and you know, the people of the state of
Michigan we want updated codes. As an industry. It's it's
it's about life safety, it's about you know, new innovations
in the building process, and and the building officials locally
(23:36):
they want the latest code. They don't want a code
that's already outdated. So I think it's it's it's unfortunate
that the state has has taken this path. And but
we're going to do what's best for you know, the
public and for the home buyers and defend them through lawsuit. Unfortunately.
Speaker 1 (23:54):
I mean, and and you know that is that is
the system that we have, you know, when when all
not I want to say, when all else fails. But
that is a path, you know, to be heard, you know,
to get something out there. And I think it's worth
having the conversation because I guess I'm scratching my head
even if I'm an official in the administration here in
Michigan that you know is really green, really wants these
you know, the perceived efficiencies. You know that that twenty
(24:16):
twenty one code can give if you have the twenty
twenty four And every other time you've kind of rolled forward.
Because I agree with you. Technologies change. You know what
you know about products change. You know what real life
experience when you put something in a house, you learn
things over time. It would just seem to me twenty
one's now in the rear view mirror. We have something new.
I don't understand the beholding to that.
Speaker 2 (24:38):
We don't understand the logic there either, but but it
is what it is, and so we're going to, as
I said, we're going to defend you know, the home
buying public. The great thing I will say in Lansing
right now is despite the code issues in the state legislature,
there's a lot of conversation about housing attainability. And that's
a good thing. And sometimes those opinions differ as to
(25:01):
what we need to do. I think there there is
a consensus though around listen, we need more supply. We
need to have a conversation about you know, local zoning
and local regulation, generally state regulation and even to to
a lesser degree, federal regulation. Regulation. Although that's you know,
that can't be something that state legislature really deals with.
(25:23):
But it's it's good that that conversation is happening, and
it's you know, housing is and should be always bipartisan.
It shouldn't it shouldn't be a partisan subject. You know.
What we're trying to do is provide shelter for people.
Speaker 1 (25:36):
And at the end of the day, Like you said,
there may be different thoughts and opinions and how we
get to some things, but that should be an issue
that everybody can roll up their sleeve. Because he said
attainability is key. Because we both know that there's been
a shortage of homes for the number of people you
know out there that we want to have a roof
over their head, there's an issue there. Affordability has also
become an issue for a variety for you know, scarcity
(25:57):
on the existing home sales side. It pushed prices up,
you know, interest rates, availability of new construction homes. You know,
all of this has kind of created an attainability and
an affordability issue.
Speaker 2 (26:08):
Absolutely, yeah, and so it's it's something that we're you know,
we're deeply involved in as an organization. I mean, we
try to you know, we always try to keep the
best interest of the home buyers in mind, right, That's
that's our our key goal is to create an environment
for the building industry to flourish and to meet the
needs of the public, not only here in southeastern Michigan,
(26:30):
but as a state and as a nation. You know,
the our state government readily acknowledges we have a significant
shortfall in housing in this state. There's a shortfall nationally.
So this isn't just a conversation in Michigan. It's happening
across the country.
Speaker 1 (26:45):
Yeah, it's one of the few times, I mean, because typically,
at least for as long as I've been in this industry,
there's a lot of times that the nation is kind
of doing one thing and Michigan was kind of doing
something else, you know, I mean, and it seems as
though right now there is a lot of nationality, you know,
to of the challenges that we're network.
Speaker 2 (27:01):
Absolutely, I mean, we're talking about a lot of these
same issues that the code is is a you know,
is a great example we talk about that not only
on a local and state level, but but on a
national level too. Permitting, you know, those types of things, inspections,
all those things that that take time and uh and
how can we best as as you know, as an
(27:24):
industry and as governmental officials, streamline that to the best
degree possible while still in it, you know, ensuring the
safety of the building process. I mean, ultimately we need inspections, right,
we need.
Speaker 1 (27:36):
Those inspections and balances, check and balance.
Speaker 2 (27:39):
But how can we do those things more efficient.
Speaker 1 (27:40):
Well, and it's funny because you were saying that, you know,
code can make people's eyes roll back. My husband happens
to be an architects, so I do hear about I
do know a little, I mean enough to be dangerous
about codes because I hear about it from a from
another perspective is as well well, kind of switching gears
just a little bit. There always tends to be some
popular trends when it comes to new home is that
I think, you know, even current homeowners, existing homeowners look
(28:02):
to new construction to kind of see what's coming. What
don't I have in my house? You know that other
people like to put in theirs. What are you kind
of seeing right now? Are there some trends that you're
you're seeing from the field?
Speaker 2 (28:13):
Yeah, so definitely some trends. I mean, you know, what
we've seen the last few years is a trend towards functionality,
you know, having rooms that are multifunctional. And part of that,
I think is, you know, we've seen some declines in
home size as prices have continued to go up. One way,
you do, well, the homes a little smaller, so having
(28:34):
that functionality built into rooms so that they can double
as a workspace and as a play space or a
workout space or whatever you may do. So that functionality,
I think the other couple of the other trends, I
mean on high end homes, what we've heard from some
of our designers that you know, sculleries having that that
kitchen behind the kitchen, so people really are focused on
(28:55):
having the larger kitchen space be their show space.
Speaker 1 (28:59):
Entertainment's eating a spot.
Speaker 2 (29:01):
Kind of behind there where where you can put the
blender and you can put the toaster and drop mail
and have a space. So on some of the higher
end homes, we're seeing that we're seeing.
Speaker 1 (29:11):
Everything all that is new again. Go through historic homes,
that's what.
Speaker 2 (29:14):
They had back in the day, dueling primaries, you know,
having that and that trend we've even seen on mid
priced housing, you know, which accounts for people thinking about
you know, having their parents and maybe longer stays or
you know, those types of things. We definitely have seen
this evolution of the indoor outdoor transition spaces right like,
(29:37):
and it started with COVID right everybody kind of went
outside and realized, oh my gosh, this is great. And
so those transitions from where you're going from the inside
to the outside, bringing more natural light to the inside,
maybe more and higher end features to the outside, little kitchens. Definitely.
Covered covered outdoor spaces is a huge thing, and we've
(29:59):
seen that with our with our home shows, which is
another one of our public outlets. You know, the number
of people that are coming through looking for you know,
those covered spaces, and so that's been an interesting trend too.
Speaker 1 (30:10):
And it's funny because I went and reversed the house
that we lived at in Northville had I mean, it
was just kind of like, you know, the overhang but
had three skylights in it, you know. I mean, but
it's so light through onto the deck. But you know,
a light rain you could still you could still still
be outside. And that, honestly, I will say that was
one of the features when we looked at the house,
we both because it happened to be a light, rainy
(30:31):
day when we did. I'm like, this is perfect. I
could still sit out here and read, you know, but
I don't have to be forest indoors. New house doesn't
have that, and that is the one thing I do miss. Yeah,
I love the new house, but that is one feature
absolutely that Yeah, I would bring back.
Speaker 2 (30:45):
If I those are the things we've seen.
Speaker 1 (30:47):
All right, Well, we're talking with Forest while he is
the CEO of the Homebuilders Association of Southeastern Michigan. Let's
talk a little bit about timeline. I know we're past COVID.
You know, when we had COVID and there were you know,
material delays and other things like that, the timeline to
get a new home built kind of expanded a little bit.
How how are things going on that front?
Speaker 2 (31:06):
Much better?
Speaker 1 (31:07):
Good?
Speaker 2 (31:07):
I mean a lot of the things that I mentioned
transformers as an example. You know that that situation has
cleared up, thankfully, and you know, we don't really have
the supply chain challenges of before. You know, typically like
a production home, you know, six months is probably the
expectation somewhere in that in that range. Obviously, custom homes
more customized. It gets the longer that timeframe probably gets
(31:29):
because you're you know, you're you're making decisions along the
way and maybe making changes along the way. But you know,
six months and up.
Speaker 1 (31:36):
It's funny you mentioned, you know, customers, we've got I
believe I'm sure a custom one being built a few
doors down from us. And then there's one kind of
a cross and over. It has been interesting to see
how slow the progression has got. And and that's that's
what we've been saying, is like, are these people making
changes and what they're doing is I don't really think
it's a material it's delay at this probably not.
Speaker 2 (31:55):
I mean, there's there are there are still issues. Obviously,
labor availability is still an ise shoe to to a
lesser degree now than I think it was a few
years ago even, but there really shouldn't be too much
in the way of the materials, you know, type of
of a situation.
Speaker 1 (32:11):
Well that it is interesting and I know, Likeki Cruise
are spreads. Then they show up, you know, for a
couple hours one day here, and then you don't see
them for a few days. They're just trying they're trying
to keep everybody happy. Yeah, I get how how that works.
I know there's been kind of a push, you know
for younger people getting into the trades. You know, are
you seeing fruits from from those efforts?
Speaker 2 (32:30):
We absolutely are. I mean we're we're definitely seeing the
growth in in young people going into the trades, but
also the growth in some of the trade schools that
are available. For example, we work really closely with with
the Southeastern Michigan Construction Academy SEMCA. They just opened a
new facility down in Westland and they're filling it with
young people who are coming for carpentry and electrical training.
(32:53):
So we are seeing that. What's been really nice is
to see that re emergence of the trade in in
high schools. I think you're you've seen a real change
in the last few years with some of the counselors
in looking at the construction trades as a career path
and trade schools, and you're seeing a revitalization even within
(33:16):
the school districts of you know, bringing back welcoming yeah,
you know, those those classes and having trade schools internally
because that is an investment. But I think understanding that
that it's a very worthy path and and and it
you know, obviously the cost of going to college, especially
for your university, has had a lot to do with
(33:38):
that too. I think it's it's it's been a natural
driver for people to look for alternatives to go to
college because college is not for everybody. It's it's it's
While it is a very worthy pursuit, it's also a
very worthy pursuit to to go into the trades.
Speaker 1 (33:53):
Absolutely, And I think I might have shared last year
my nephew went into welding and he's got his welding
certificate and now he's got a job he's doing now.
I think like the union program, you know, where he's
going through and stuff like that. And he had several
of his friends that you know, went into various different
you know, career paths like that because college wasn't going
to be for him. He's very intelligent. I could believe
(34:14):
he could do anything he wanted to in college. He
just doesn't want to sit in a class.
Speaker 2 (34:16):
Absolutely. Yeah, it just wasn't right for him. And you know,
I've said consistently that the labor issue is a generational issue.
It's not something we were going to fix in one
year or five years or even ten years. But we
are making I think some significant progress. You know, our
organization has tried to support through our foundation, support young
people with scholarships to try and encourage it. But a
(34:39):
big part of what we've done, both locally on a
state level and on a national level, has have this
conversation so that we get a mindset change within the
schools so that they really do start to see that value,
and I think that's that has definitely taken hold well.
Speaker 1 (34:54):
I mean, and obviously the skilled trade is so needed,
you know, for you know, for your industry and then
as as an individ visual homeowner having moved into a new,
newer home that needed some work done. It's like we
were calling all electricians and plumbers and you know, all
of those and you know, lucky enough that we our
realtor had good connections where they would come out relatively quick,
you know, but you always need the people.
Speaker 2 (35:15):
With that skill set. People with those skills.
Speaker 1 (35:17):
Yeah, they're I don't think AI is going to replace.
Speaker 2 (35:20):
We'll probably not there yet. Nope. There are some things
efficiency wise that we have that we have seen along
the way with you know, but ultimately you need somebody
to come to the house to make the repairs or
in a new construction environment to come and you can
you know, you can build some components off site, but
you you ultimately need people where you are doing that.
(35:42):
I'm sure that quality Well.
Speaker 1 (35:43):
I brought up AI because that's I mean, tariff says
the word of the year, uncertainty. But AI is not
far behind, you know, as far as getting people's attention
this year. Are you seeing it creep into your world
or do you see it creeping into I mean, we.
Speaker 2 (35:56):
We have I don't want to say we've seen it
creep into much. I mean, ultimately a lot of our
business is still driven by, you know, that human aspect. However,
I think you do see it in the parts of
the process, whether that be through the architectural and through
the design process, how our members do their everyday business,
(36:17):
and utilizing AI to make things operations within their office
more efficient. So we do see it on those levels.
But you know, the building process in a lot of
ways is still still is. I mean, it's still very
hands on.
Speaker 1 (36:32):
Which is good. So robot's not coming to my house,
probably not had a new roof put on this year,
and I know it was a crew that actually was
there that day, about twelve of them.
Speaker 2 (36:41):
But they can use a lot of technology to help
them isolate, especially when you look at roofs, you know,
utilizing drone technology and utilizing some of those sorts of things.
So technology is definitely being utilized more, but you still
need that human element.
Speaker 1 (36:54):
Well, if we have somebody that is interested in new construction,
whether they're just on the front end of thinking about it,
June is a great month because it is Parade of
Parada Homes month, and this is kind of your your month,
this is your event. And if I'm not mistaken, this
is the thirty sixth annual event. So how are things
going this year?
Speaker 2 (37:12):
They're going great. So the Parade of Homes is one
of the most significant public outreach efforts of the Homebuilders
Association of Southeastern Michigan. And as an organization that represents
you know, builders and remodelers and developers, this program is
is a is a key way for us to showcase
the breadth and depth of the industry here in Southeastern Michigan.
(37:32):
And so, you know, it's a it's a The best
part of all is it's free for the for the public.
But it's it's a you know, it's it's a way
for us to showcase those those model and inventory homes
that are available throughout Southeastern Michigan. It's you know, it's
it includes thirty two homes this year. It's you know,
it's available that there's a magazine that that we have
(37:54):
during the month of June that's available. It's available to
our partner at Lake Michigan Credit Union there there are
a key sponsor for this program.
Speaker 1 (38:00):
It's beautiful, like full color. Yeah, it's very very right.
Speaker 2 (38:02):
So there's there's that publication that goes out through the
Detroit newspapers as well, but ultimately, our our parade website
is available all year, so we highlight things in June,
and June is like a big month for us. But
you know, our our parade website at PARADEHBA dot com
is available all year, so it's a great way for
the public to be able to view, whether it's through
(38:23):
the publication or the you know, the website. You know,
those different home plans and the different availability of homes
and throughout southeastern Michigan. So work's really excited about the
month of Jim.
Speaker 1 (38:33):
Well, I think one of the things and I've asked
I'm sure I've asked you this before, but just for clarity,
because I think sometimes when we say, you know, new home,
some of the bigger, you know, custom homes come to mind,
but when we're talking new construction home, it can be
anything from a condo to the to the you know,
the big luxury so you're you're a vent in June
really does span price points and styles.
Speaker 2 (38:55):
Our members are great about participating in this and providing
us with a wide range of housing. So this year's parade,
from a price perspective, prices start at mid two hundreds
and they go all the way up to two point
five million, so you can see it's a pretty wide disparity.
But so so there's something there for everybody. Some of
those homes are we have I think nine that are
(39:17):
are kind of minium products, okay, And so there's there's
really a wide range of housing in a wide geographic
spread throughout southeastern Michigan. So yes, it's it really does
have something for it.
Speaker 1 (39:30):
Well in that mid two hundred I mean that's that's
below the median you know price you know for like
existing you know existing home. So that's a really good price.
Speaker 2 (39:37):
And that's oftentimes where those condo products come in is
because they they that's a way to help to address
this housing attainability issue and you know, provide something for
for you know, entry level buyers or even maybe you
know empty nesters that want to downsize.
Speaker 1 (39:52):
You're taking the words right out of my mouth, because
that's what I was going to ask you is do
you are you seeing condos increasing in where people are
looking more for.
Speaker 2 (40:00):
I think, yeah, and part of that is geographic and nature,
you know, and the sites that are available. But yes,
we I mean we we continue to see, uh, you know,
the definite viability in condo products, to attach condo.
Speaker 1 (40:12):
Products because I mean I think absolutely, I mean they're
great for you know, potentially first time buyers, you know,
something like that, but I think equally a good option
for like you said, empty nesters that maybe, like if
we could afford to put my mom in a condo,
I would because you know, the long care and maintenance
is getting to be a bit much and it's hard
for me remotely, you know, to take care of two yards.
Speaker 2 (40:30):
You have a lot of advantages there.
Speaker 1 (40:31):
Yeah, there's there's some nice advantages that can come along
with that. So give the give the web address again
one more time where people can go.
Speaker 2 (40:40):
Yes, it's it's PARADEHBA dot com and that as I mentioned,
it includes really all the interior exterior photos and renderings
of the homes that are in the parade, lots of
location information and it's it's fun too because we you know,
the builders will have and it's this is on the
website they have during the month of June their open
house parties that are a ton of fun. Those are
(41:02):
typically on the weekends, you know, and we do our
Sunshine Dance to keep keep the weather nice.
Speaker 1 (41:07):
It's like you got a really sunshine but a little
warmer this week end.
Speaker 2 (41:10):
It looks so. So those are great and fun events.
We have some giveaways on the website, hundred dollars, you know,
gift gift card giveaways, things like that. So we want
to make so free and gifts free, and I mean,
how can you go wrong here? Exactly? No, we want
to make this fun and it's it's a like I said,
it's a it's a great way for us to expose
to the public. You know, all the is available in
(41:31):
the housing industry in southeastern or Michigan right now.
Speaker 1 (41:34):
Well as we kind of you know, bring this conversation
to close. If somebody's out there listening and they're you know,
maybe they've been kind of considering, you know, new construction,
you know, things of that nature, what advice would you
have to someone that's you know, looking maybe to make
a move and they're not sure, you know, trying to
find something in the existing market, should I know, no,
new construction kind of give them some advice.
Speaker 2 (41:55):
Well, first of all, go like check out the freight
of homes that that can advise you to to a
great extent. I mean, it really does, and that is
a great way to begin, is to go to gread
HbA dot com and check things out. But it's also
I think it's about those relationships, you know, like anything else,
whether if you were gonna, you know, do a repair
on your house, you'd get a few estimates and you
(42:17):
talk to a few contractors. It's it's it's very similar.
You really need to to to do your research, you know,
figure it out, figure out what what those things are
that you want in a in a in a home.
Speaker 1 (42:27):
Yeah those needs versus wants, Yeah.
Speaker 2 (42:29):
Versus wants. Talk to builders, you know, go out and
talk to a few of them, get a better feel.
Do your research. You know you're gonna be able to
get an understanding of the quality of a builder. You know,
you can go on our website at builders dot org.
We list all of our builder members that are available there.
But it it is really about that research and figuring
(42:50):
out what it is that you want. You mentioned that
that back and forth between an existing home or or
potentially a new home and there there are qualities to both,
right and so you also, I think have to have
a firm understanding of what those time frames are going
to be. And that's that's talking with your builder. You know,
they'll they'll help to give you some of those expectations,
but also understanding that that the new building process can
(43:15):
sometimes have some roadblocks right where where you can't get
a permit because the local government has backed up for
a certain period of time, or there's there are things
that are out of the builder's control. But they can
help you, help walk you through you know what those
timeframes are, what to expect, and so it's you know,
it's it's a it's a great time one way or another,
whether you're you're buying an existing home or whether you're
(43:35):
you're you know, going to invest in a new home.
You know, it's it's the biggest investments that you're going
to make. And I know that sounds cliche, it's set
over and over again, but it's think you have to
keep that, you have to keep that in mind, that
you need to take the time to really figure out
what it is that you want, how you want it,
and where you want.
Speaker 1 (43:53):
It well and absolutely because it's it's you know, it's
an asset, but it's the asset you get to live in,
you know, unlike any other asset that you have. I mean,
and so it's always interesting to me that sometimes I know,
from my perspective, I think people spend more time picking
where to go to dinner or on vacation than they do,
like you said, doing the research of something that's this important.
(44:13):
And I mean maybe it's because we're comfortable making those decisions.
We feel like we're in control, you know somehow. But
it's like when it comes to this, I completely agree.
Is you know, go out there, this the event that
you're having right now is a wonderful opportunity to get
exposed to a variety of different builders kind of you know,
see get to know, ask questions. There's nothing that I mean,
there's nothing wrong with that.
Speaker 2 (44:31):
Yeah, And that's that's a great thing about our Parade
month is that it's it's it's a easy way to
go out, whether it's through the house parties or just
to go out when they're when the model is open,
you know, talk to the builder and there they're they're salespeople.
It's a no pressure environment, right, It's going to be fun.
They want you to see their products, sure, but they
also recognize that, you know, their product may not suit everybody.
(44:54):
So it's a great way through our through our parade
to be able to go out and experience the you know,
like I said before, the breadth and the depth of
the housing market.
Speaker 1 (45:01):
And and you guys make it really easy because it's
not always that easy. Like in more of the existing
you know world, you can go see homes, but you've
got to schedule the showings, you know, and this, that
and the other thing. And you know this, especially during
the month of June. You make it. You couldn't make
it more easy for you know, folks, you.
Speaker 2 (45:16):
Want, we just we do suggest go to our website
at pradhba dot com because it because it will tell
you when those those open house parties are in the
hours and so forth.
Speaker 1 (45:25):
Well, of first, is there anything that we didn't cover
that was kind of on your mind that you wanted
to get across.
Speaker 2 (45:30):
To listeners about today? They cover a lot.
Speaker 1 (45:35):
We covered everything from tariffs to you know, uh, unemployment,
mortgage rates, government regulation. I guess I'm just going to
circle back to that real quick because I think the
regulation side of thing flies under the radar. Is there
anything that people listening could do to influence you know,
they're elected leaders in this or is it really more
(45:55):
coming from you know, your end and what you're going.
Speaker 2 (45:58):
To Well, I think, I mean, I think there's a
couple of things. Number one is is is you know,
if you're if you're talking to an elected official, whether
that elected official is somebody on a local level, on
a state level, whatever, you know, emphasizing the importance of
housing in our you know, our community, that it has
to be a wide range of housing. You know, we
(46:19):
need you know, we need our lawmakers to have difficult discussions.
But the second thing is is is if you're talking
with somebody to to make sure that you emphasize this
should not be a partisan issue. This is something that's
fundamental to not only the economic success of our nation,
but it's fundamental to our our well being as people
(46:42):
to have adequate shelter.
Speaker 1 (46:44):
Absolutely, I mean. And and to me, it seems as
we've gotten to a point politically where nobody wants to
give somebody else a win right instead instead of we
all hate, we can all take ownership of moving some
piece of legislation or you know, something forward. We can
all towut our check and say we did you know,
we did this. It just seems that that's missing, you know,
and it's a shame because, like you said, housing, there
(47:06):
are certain topics that should just transcend all of that
and I would think housing should be.
Speaker 2 (47:10):
At the top of the list that list.
Speaker 1 (47:12):
Yea, absolutely, absolutely, yeah, maybe you know, in safety would
be another one, but absolutely housing. Well, Forest Wall has
been with us today and he is the CEO from
the Homebuilders Association of Southeastern Michigan. It has been a
true pleasure. Haven't you here today?
Speaker 2 (47:27):
That's so much for having me. I appreciate it.
Speaker 1 (47:29):
Well, it's always nice to get insights from you know,
your industry and what's going on there. And I guess
one last time, as we're you know, as we're closing out,
I know you've got the prede HbA website. Was there
any other websites or anything else that you want to direct.
Speaker 2 (47:43):
People from general information? Our builders dot org is our
website for the Homebuilders Association of Southeastern Michigan. There's a
lot of information there too, but yes, pradhba dot com
is the key site right now for the month of June.
Will parade is on, so we hope people will go
check that out.
Speaker 1 (47:56):
And if you happen to be listening to the after June,
sorry you missed the event, but the all the other
information still holds true. You can you can still go
out there well. For us, thank you so much, and
to our listeners, thank you for joining us today. We're
always happy to have you with us and we look
forward to chatting with you again soon. We hope you
enjoy today's episode. Don't forget to subscribe, write a review,
(48:19):
or rate the show as it helps us reach more people.
You can also follow us on Facebook and Instagram.
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