The nation’s housing market may be in a slump, but some Lansing-area businesses are viewing this downturn in a positive light and are finding ways to make money in a rough market.
This glass-half-full path offers a few other bright spots, too, especially if your interests are a bit on the “green” side—for example, if you like the idea of more people buttoning up leaky and energy-guzzling homes while helping Michigan keep some extra cash in the state’s economy.
Or, if you’re a community advocate who thinks that investing more time and energy in our existing neighborhoods and fostering some good ol’ fashioned neighborhood pride isn’t all bad.
Here’s a quick look at the silver lining on the black cloud of recent housing trends.
Going GreenMatt Rosendaul, owner of
Great Lakes Home Performance, has only positive things to say about how the housing market is affecting business.
“One of the things that is nice about the business I’m in is that I do well even when the real estate market is down,” says Rosendaul.
The idea goes like this: When the housing market hits a rough spot, homeowners often look to make improvements to their current homes, rather than simply selling.
Many do this by making their houses more energy efficient, which saves them money and makes their house more attractive to future buyers.
Great Lakes Home Performance analyzes houses for their energy performance. So Rosendaul's business is at the nexus of several big trends, including
increasing energy costs, a declining real estate market and a
burgeoning environmental sensibility.
“If you’re tired of paying high energy bills I come in and tell you what you need to do to reduce costs and give you all the specifications to do so,” Rosendaul says. “Business has tripled—and it is rare to find a business that will do well in such a bad market.”
Rosendaul can quantify
—right down to the dollar
—how much customers will save with different energy-conscious installations.
For example, “By finishing the basement of a small house and insulating the walls in that basement, a homeowner will save $479.00 a year. Thus, they get the double benefit of not only saving energy but creating more livable space.” He can even tell a buyer what their energy bills will cost before a home is built.
Economic BoosterRosendaul says it’s impossible to give a broad estimate of how much it costs to make a house greener, simply because everyone has a different “green” budget, and clients choose different methods to get there. Some may go for an entire home makeover, while others may install new windows or replace an aging appliance, such as a more energy-efficient furnace or refrigerator.
But this much he knows: “Whatever changes you plan on making, it typically takes less than one year to earn back the money you invested to make them.”
Increasing utility costs related to rising oil, propane and natural gas costs only boost his business, as does proposed legislation that aims to mandate energy efficiency.
“If the energy bills pass that are currently in the Senate, I will have to hire up to five new employees and business will increase ten-fold,” he says.
“Even if the bills don’t pass, business will still continue to grow and I will let it do so without forcing it. I like to say, ‘I will let it grow organically.’”
While citizens are saving money and making their homes more marketable, they’re also saving the state’s economy. By going green, Michiganders aren’t only helping local businesses like Great Lakes Home Performance. They are also putting the money they had previously spent on energy costs back into the state.
“Of the $24 billion a year that Michigan spends on energy costs,” says Rosendaul, “almost all of it leaves the state because we buy all of our energy from out of state,” in the form of coal for power plants, uranium for nuclear plants, and similar non-renewable sources.
Simple Change, Big DifferenceWilliamston-based interior designer and owner of
Hart-Davidson Designs, Leslie Hart-Davidson, saw more than a 40 percent increase in business last year.
“Folks who would have at one time moved up, are using the equity in their homes to make a house work for them,” she says.
Hart-Davidson says that she has had several clients who, after a market analysis, realized that they couldn’t afford to move up. In such cases, they hire her to remodel kitchens or add new rooms.
Hart-Davidson adds, “Many people are also just making cosmetic changes like new flooring, paint colors and window treatments.”
The general consensus in Michigan, she suggests, is that families who can’t afford a new house feel they may as well increase the value of the one they’re in, or at least give it a face lift so that when the market ripens, the house will sell.
Hart-Davidson's business will be doubling in size shortly, as she foresees a 50 percent increase in sales from 2007 to 2008.
Another IncentiveThe city is also trying to put a positive spin on the housing market by instituting a new home improvement rebate program. This program has not officially been announced, but a tentative public launch date is scheduled for early July.
The Home Improvement Rebate Program will basically mean that general repairs to owner-occupied housing will not increase the taxable value of the home. Technically, according to Bob Johnson with the
City of Lansing, “Taxes do go up on your tax bill, but you are reimbursed these charges.”
This program is projected to run for three to five years, depending on the market. The city hopes the program will encourage citizens to improve the quality of value of their homes while waiting for an upturn in the market.
“There is already interest, even though the program hasn’t been officially announced,” Johnson says.
And it’s a good thing homeowners are ready to make improvements because real estate brokers—the true market gurus—are anticipating a real estate revival.
Diane Sanborn, an associate broker with
Coldwell Banker Hubbell BriarWood, says the revival will be particularly strong in
Downtown Lansing.
Sanborn is not the only one of this mindset; it seems her whole company is behind her. Coldwell Banker Hubbell BriarWood is opening the first real estate business in Downtown in 25 years, and they're there because they foresee such a bright future for the area.
“There has never been a better time for buyers to buy," says Sanborn. "Mortgage rates are very good and prices are almost the best they have ever been. Thus the
INNW ('If Not Now, When') slogan.
Brynn Howard is a contributing writer to Capital Gains.
Dave Trumpie is the managing photographer for Capital Gains. He is a freelance photographer and owner of Trumpie Photography.
Photos:
Great Lakes Home Performance Green Build Michigan software
Matt Rosendaul reviews the new Sunny Crest Youth Ranch in Sunfield
Leslie Hart-Davidson
Leslie works on a project in her Williamston studio
Future downtown home of Coldwell Banker Hubbell BriarWood
All Photographs © Dave Trumpie