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Despite population growth, an announcement by a
large employer of its forthcoming departure created a
development impasse for Washtenaw County. At
that time, Lodi Township sought Allen & Associates
to assess the development potential of a single-family
residential development
Not including the proposed 660 lots at the subject
site, the market area of the subject site at that time
had an abundant supply of single family lots/homes
in active subdivisions. The supply was anticipated to
increase by nearly 75% as pipeline developments
were added over the next several years-this without
considering the supply of existing (resale) homes on
the market or of homes on large acreage parcels.
The competitive environment in the market area at
that time contained 47 existing active and
competitive detached single family developments
with 1,698 available lots; the bulk of the existing
supply (65%) was of housing priced between
$225,000 and $425,000, with the $225,000-$274,999
range having the greatest concentration of supply.
Future supply was 1,245 lots with 86% of the
proposed lots in the $225,000 to $425,000 price
range. The pricing profile of the future supply, as
estimated from available data, indicated that it will
have characteristics similar to the existing supply-
with nearly 40% of the offerings anticipated to be
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delivered in the
$225,000$274,999
price range. In summation, the market area contained
an extensive available and proposed supply of home
sites offered in a wide variety of developments and
price ranges but especially in the $225,000 to
$425,000 price range.
The economic position of the Ann Arbor
Metropolitan Statistical Area, comprised of
Washtenaw County, was once a bastion of stable
employment levels supported by a broad mix of
industries. This had been slowly changing in recent
years as recent and current non-farm employment in
the region dropped to levels well below the peak
experienced in 2001
Even government employment, which was
historically strong based upon the local universities,
was threatened by the State of Michigan's own
eroding financial position; with major revenue
shortfalls projected for the near term. Positive
employment news was far surpassed by announced
downsizing and closures.
Overall, the market area was considered to be oversupplied.
Based on our the combined existing and
proposed supply and our concluded demand for new
construction single family housing in the market
would require 7.7 years to absorb. |
