They were supposed to build more houses this year in Michigan. They didn't. That means home prices are going up. Good news if you're an owner. Bad news if you're trying to buy.

According to the Detroit News. builders have four problems right now: a labor shortage, a vacant land shortage, increased material costs and, in some places, building permits which may take months or years to get approved.

To keep up with the demand for housing, the Home Builders Association of Michigan (based right here in Lansing on Creyts Road) estimated that Michigan needed 25,000 new homes built this year. Only about 17,000 will actually be built. And the majority of those are more expensive than a lot of people can afford. Contractors just can't make enough money on smaller houses. (They only make 2 or 3% profit) Lumber prices are way up, the state's lost a lot of skilled construction labor (we lost 60,000 construction workers from 2000-2009) and land prices keep going up. So, most of the new houses are priced at $300,000+.

We may not have quite the problem they have in the Detroit suburbs, but if you've got a clean house priced lower than $300,000, looks like you're sitting on some cash. And if you're buying - stay around here.

Here's the story.

 

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