It’s All Downhill from Here – Michigan’s Construction Industry

By: Dan Schultz

Edited by: Alexis Kowaleski and Noah Shepardson

The growing economic slump is only getting worse throughout central (MID) Michigan, and it’s beginning to affect more than just the construction industry.

Megan Kennedy, president of Central Michigan University’s Student Chapter Home Builder’s Association, has seen the effects.

“The problem has become that homes are so over valued that they are being sold for much more than their actual worth,” she explained. “Mortgage companies were more than happy to write loans for whatever amount, but lately the new homeowner is realizing that they couldn't afford the purchase. But by then it is too late.”

She goes on to say that homeowners eventually move to a smaller, more affordable household. But, the larger house they left is failing to sell.

“Millions now faced two mortgages and could not afford to live,” she said. “The economy came to a standstill when all incomes coming into a household went to pay the basic bills, not for extra luxuries.”

The luxuries that once fueled businesses in Michigan are slowing to a standstill, and areas of central Michigan such as Isabella County are seeing the damage firsthand.

Isabella County’s unemployment rate rose to 5.3 percent in the third quarter of 2007. It looks to only increase as long as business remains down.

“We got the worst,” Bruce Frost said. Frost, who runs the Construction Management Program at Central Michigan University, said that a recent statistic shows construction in Michigan has dropped as low as 67 percent. Compare that with a mere 8 percent drop in Florida.

“That’s unbelievable,” exclaimed Frost, a member of the construction board of appeals in Alma.

Frost and a group of students in the program are heading down to Florida for the annual International Builder’s Show in Orlando. He was sure to remind builders how lucky they are.

“If I hear them complain at all, I’ll tell them they got nothing compared to Michigan,” he joked.