WIXLIB

4Economic Conditions ContinuedL a n s i n g - E a s t L a n s i n g , M I C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I Sshows labor force, resident employment and unemployment rate trendsfrom 2000 through 2015.The education and health servicessector added the most jobs from 2000through 2010 and has been the secondfastest-growing sector in the HMAsince 2000 (Figure 3). Sparrow HealthSystem is the third largest employer inthe HMA; although its employees arecounted in the government sector, itsgrowth is representative of employmentgains in the education and health ser vices sector. Sparrow Health Systemis in the process of a 100 million ex pansion. The Herbert-Herman CancerCenter, part of the Sparrow HealthSystem and expected to open in thesummer of 2017 with a developmentcost of 64 million, will support approx imately 90 positions. Also scheduledfor completion in 2017, the SparrowHealth Center Lansing will includeover 100 staff and a 20 milliondevel opment cost. Sparrow HealthSystem’s main campus is east of thestate capitol building and midway tothe city of East Lansing. One-halfmile from the Sparrow Health Systemmain campus, the Lansing Lugnutsplay Class A minor league baseball inCooley Law School Stadium. During2014 and 2015, it underwent a 24.5Figure 3. Sector Growth in the Lansing-East Lansing HMA, Percentage Change, 2000 to CurrentTotal nonfarm payroll jobsGoods-producing sectorsMining, logging, & constructionManufacturingService-providing sectorsWholesale & retail tradeTransportation & utilitiesInformationFinancial activitiesProfessional & business servicesEducation & health servicesLeisure & hospitalityOther servicesGovernment– 30– 20– 1001020304050Note: Current is based on 12-month averages through December 2016.Source: U.S. Bureau of Labor StatisticsTable 3. Major Employers in the Lansing-East Lansing HMAName of EmployerState of MichiganMichigan State UniversitySparrow Health SystemGeneral Motors CompanyAuto-Owners InsuranceLansing Community CollegeMcLaren Health CarePeckham, Inc.Meijer, Inc.Ingham Community Health DepartmentNonfarm Payroll SectorNumber ringProfessional & business servicesGovernmentEducation & health servicesEducation & health servicesWholesale & retail 002,5003,5001,400Note: Excludes local school districts.Source: Lansing Economic Area Partnership, 2016million renovation, including an 11million apartment property designedinto the stadium. Continued development is occurring in this area andmoving east toward the city of EastLansing and MSU.MSU enrolled 50,350 students dur ing the fall 2016 semester, taught by5,550 faculty and academic staff andassisted by 6,975 support staff, andis the second largest employer in theHMA (Table 3). Including Michigan’s

L a n s i n g - E a s t L a n s i n g , M I C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I S5Economic Conditions ContinuedCooperative Extension Service, MSUhas staff in every county of the stateand had an estimated statewide economic impact of 5.3 billion during2014, the most recent data available(MSU data). MSU has the nation’sbest graduate program in nuclearscience (U.S. News and World Report,2014 rankings). In 2008, the U.S.Department of Energy awarded agrant to MSU to develop the Facilityfor Rare Isotope Beams. This facility,with completion expected in 2022 ata cost of approximately 730 million,is expected to include a permanentstaff of 300 scientists, engineers, andsupport personnel and to attract up to1,000 visiting staff annually and hasspurred related development in theHMA.Because of these expansions, nonfarmpayrolls are expected to increase by anaverage of 3,400 jobs, or 1.5 percent,annually during the next 3 years.Manu facturing payrolls are unlikely tomaintain their current rate of growthbecause of a forecast decline in domesticautomobile sales, f ollowing recordsales in 2015 and 2016. General Motorsannounced it is halting third-shiftproduction at its Grand River Assembly Plant in January 2017, whichwill affect approximately 800 jobs.As investments in healthcare infrastructure reach completion, hiringin the education and health servicessector is likely to increase modestly.The financial activities sector is alsoexpected to expand. The JacksonNational Life Insurance Company,which is headquartered in the HMA,has added approximately 500 employees since 2013 and expects to add 300more during the forecast period.Population and HouseholdsAs of January 1, 2017, thepopulation of the LansingEast Lansing HMA is estimated at475,100, an average annual increaseof 1,650, or 0.3 percent, from 464,036in April 2010. This follows averagegrowth of 1,625 people, or 0.4 percent,each year from 2000 to 2010. As ofJuly 1, 2015, the city of Lansing hada population of 114,485, accountingfor 24.3 percent of the HMA’s population, down from 24.6 percent in April2010 and 26.6 percent in April 2000(U.S. Census Bureau populationestimates as of July 1). Similar to thecity of Lansing, the population ofIngham County declined relative tothat of the HMA from 2000 to 2010but has stabilized since, accountingfor 60.6 percent of the HMA population as of July 1, 2015, up from 60.5percent as of April 1, 2010. Thisdemo graphic shift is because thepopulation in the city of Lansing hasfallen less rapidly since 2010 thanduring the previous decade, and certaintownships within Ingham County—including Aurelius, Meridian, andWhite Oak—have grown at higherrates since 2010.Net-migration is a crucial factor inpopulation change in the HMA andgenerally shifts in response to economicconditions. Figure 4 shows the components of population change in the HMAfrom 2000 through the forecast date.From 2000 to 2004, the population of

the HMA rose by an average of 3,300,or 0.7 percent, annu ally. During thistime, net in-migration averaged 700per year, contributing 21 percent ofthe population gain, with the balancefrom net natural change (resident birthsminus resident deaths). From 2004 to2007, population growth slowedsig nificantly, averaging 0.1 percent, or690 people, annually. This periodencompassed the loss of the Oldsmobile nameplate and the closure of threeGeneral Motors production facilities,and net out-migration averaged 1,650people annually, reversing the previoustrend. From 2007 to 2009, populationfell because annual net out-migrationincreased to 2,500 peo ple, more thanthe 2,175-person annual net naturalchange, resulting in popu la tion loss of330, or 0.1 percent, annually. TheFigure 4. Components of Population Change in the Lansing-EastLansing HMA, 2000 to Forecast2,500Average annual changeL a n s i n g - E a s t L a n s i n g , M I C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I S6Population and Households Continued2,0001,5001,0005002007-to-2009 period encompassed theonset of the Great Recession. Whennonfarm payrolls expanded in theHMA during 2010, net out-migrationslowed to an average of 650 peopleannually, and the popu lation in theHMA rose by 1,250, or 0.3 percent,annually from 2009 to 2012. Since2012, net-migration reversed, averaging net in-migration of 180 peopleannually, and population growthexpanded to 0.4 percent, or 1,825people, annually primarily because ofstronger economic conditions in theHMA. See Table DP-1 at the end ofthis report for additional data ondemographic and economic trends inthe HMA.During the 3-year forecast period, thepopulation of the HMA is expectedto increase by an average of 0.4 percent,or 1,825, annually, similar to growthrecorded since 2012. Net in-migrationis expected to average approximately100 people annually, slightly below therate recorded since 2012 as eco nomicperformance is expected to slowmodestly.0– 500– 1,0002000 to 20102010 to currentNet natural changeCurrent to forecastNet migrationNotes: The current date is January 1, 2017. The forecast date is January 1, 2020.Sources: 2000 and 2010—2000 Census and 2010 Census; current and forecast—estimates by analystFigure 5. Number of Households by Tenure in the Lansing-EastLansing HMA, 2000 to 0002000Current2010RenterOwnerNote: The current date is January 1, 2017.Sources: 2000 and 2010—2000 Census and 2010 Census; current—estimates by analystSimilar to population growth, thenumber of households in the HMAhas increased at a slower rate since2010 than during the previous decade,and the homeownership rate hasdeclined. Since 2010, the number ofhouseholds has increased by 970, or0.5 percent, annually to an estimated190,000. During the previous decade,households grew at an annual averageof 1,100, or 0.6 percent. The homeownership rate in the HMA declinedfrom 65.4 percent in 2010 to a currentestimate of 62.8 percent. Figure 5illustrates the number of householdsby tenure for 2000, 2010, and thecurrent date. While the sales housingmarket is recovering, the effects fromthe Great Recession, including more

7Population and Households ContinuedFigure 6. Population and Household Growth in the Lansing-EastLansing HMA, 2000 to Forecast2,0001,800Average annual changeL a n s i n g - E a s t L a n s i n g , M I C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I S1,6001,4001,2001,00080060040020002000 to 20102010 to currentPopulationstringent downpayment requirementsand the need for larger downpayments,make home purchases more difficult.In addition, increased levels of homeforeclosures, now abating, shiftedhouseholds from owner to rentertenure in the HMA. During the forecastperiod, the number of households inthe HMA is expected to increase by1,000, or 0.5 percent, annually toapproximately 193,000 households byJanuary 1, 2020 (Figure 6).Current to forecastHouseholdsNotes: The current date is January 1, 2017. The forecast date is January 1, 2020.Sources: 2000 and 2010—2000 Census and 2010 Census; current and forecast—estimates by analystHousing Market TrendsSales MarketThe sales housing market in theLansing-East Lansing HMA is currentlybalanced with a 1.6-percent vacancyrate, down from 2.5 percent in 2010.The current inventory of unsoldhomes in the HMA increased to 3.8months of supply in November 2016from 3.6 months of supply a yearearlier but below the 3.9 months ofsupply available as of April 1, 2010(CoreLogic, Inc., with adjustments bythe analyst).New and existing home sales in theHMA increased during the past year,continuing a trend that began in 2012because of strengthened economicand demographic trends. During the12 months ending November 2016,the number of new and existinghomes sold in the HMA rose morethan 8 percent, to 8,175, the highest12-month total since November 2006.From 2001 through 2005, new andexisting home sales rose 3 percentannually to 8,525 in 2005. Home salesthen fell to 5,725 during 2008, decliningan average of 12 percent annually.This period of decline occurred afterGeneral Motors ended the Oldsmobileautomobile brand and coincided withmanufacturing plant closings that occurred during 2005 and 2006. Homesales in the HMA remained low forthe next 3 years, averaging 6,000 annually during 2009, 2010, and 2011.From 2012, home sales in the HMAincreased an average annual 9 percentto 7,450 homes in 2015.During the 12 months ending Novem ber 2016, new home sales totaled 260,or 3 percent, more than the salesduring the previous 12 months. Afterreaching a peak of 690 new homessold during 2006, new home sales fell,averaging 38-percent declines annually to 170 during 2009, the low point

L a n s i n g - E a s t L a n s i n g , M I C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I S8Housing Market TrendsSales Market Continuedof the Great Recession nationally andin the HMA. New home sales haveremained low since 2009, averaging230 sales annually from 2009 through2014. New home sales prices haverecovered from losses during the late2000s, however. The current averagesales price of 221,800 is 10 percenthigher than the average during theprevious 12 months and 35 percenthigher than the prerecession high of 164,600 during 2008. New homesales prices are increasing at a fasterrate than new home sales, becauserecent construction has been concentrated in the higher-priced communities of Delhi and Meridian CharterTownships. These two communitiescomprised 31 percent of single-familyhomes permitted from 2012 throughthe current date, 21 percent from 2009through 2012, and 20 percent from2000 through 2009.Existing home sales in the HMA totaled7,925 during the 12 months endingNovember 2016, nearly 9 percentmore than the 7,300 sales recordedduring the previous 12 months. Theaverage sales price for an existing homewas 131,200, or 8 percent, above theaverage sales price a year earlier. Existing home sales in the HMA peakedduring 2005, when 7,975 home saleswere recorded, and fell an averageof nearly 12 percent annually to therecent low level of 5,400 during 2008.In contrast to new home sales prices,which are higher than prerecessionlevels, existing home sales prices haverecovered only to prerecession values.From the prerecession peak value of 129,900 during 2005, existing homesales prices reached a recent lowof 86,250 during 2011, an averagedecline of nearly 7 percent annually.Existing home sales prices increasedan average of 9 percent annually duringthe next 4 years to 123,200 during2015. Existing home sales prices areconstrained by distressed home sales(real estate owned [REO] and shortsales), which remain elevated in theHMA.Distressed home sales began signifi cantly impacting the HMA during2007; prior to 2007, such sales ac counted for fewer than 9 percent ofall existing home sales. By 2009, theyear nonfarm payrolls registered theirlargest decline, nearly one-half of allexisting home sales were distressed.Since 2009, the ratio has fallen, andduring the 12 months ending Novem ber 2016, 21.2 percent of all existinghome sales were distressed, slightlyhigher than the 20.4 percent rate ayear earlier. The impact of distressedsales on existing sales prices is alsoslowing but still significant. The currentaverage sales price for an existinghome, 131,200, is approximately 12percent lower than the average nondistressed resale price of 147,300,because the average distressed salesprice was 59,200. By contrast, during2009, the impact was larger; theaver age existing home sales price was 90,300, about 31 percent below thenondistressed average sales price of 118,700. Seriously delinquent loans(those 90 or more days delinquent orin foreclosure) and REO propertiescomprised 2.2 percent of mortgageloans in the HMA, down from 2.7percent in November 2015, and thepeak rate of 7.6 percent in January2010. By contrast, the rate of seriouslydelinquent loans and REO p ropertiesin the state of Michigan and nationallywas 1.9 and 2.6 percent, respectively,during November 2016, both downfrom values of 2.3 and 3.3 percent ayear earlier.

Sales Market ContinuedNew single-family development inthe HMA is predominately locatedadjacent to employment centers in thecities of Lansing and East Lansing inadjoining townships, including Deltaand Meridian Charter, in communitieslike Haslett, Okemos, and Waverly.Comparatively lower levels of singlefamily homebuilding since 2007, withincreased population and households,have enabled the sales market to returnto balanced conditions. From 2000through 2005, single-family homepermitting averaged 1,750, beforefalling to an average of 760 duringFigure 7. Single-Family Homes Permitted in the Lansing-East LansingHMA, 2000 to 203202001202000020L a n s i n g - E a s t L a n s i n g , M I C O M P R E H E N S I V E H O U S I N G M A R K E T A N A LY S I S9Housing Market TrendsNotes: Includes townhomes. Current includes data through December 2016.Sources: U.S. Census Bureau, Building Permits Survey; estimates by analystTable 4. Estimated Demand for New Market-Rate Sales Housing inthe Lansing-East Lansing HMA During the Forecast PeriodPrice Range ( )FromToUnits ofDemandPercentof ,999and higher7001,12556042025.040.020.015.0Notes: The 150 homes currently under construction and a portion of the estimated6,175 other vacant units in the HMA will likely satisfy some of the forecast demand.The forecast period is January 1, 2017, to January 1, 2020.Source: Estimates by analyst2006 and 2007 and again to only 260homes permitted annually during2008 and 2009 (Figure 7). As theeconomy recovered and demographictrends have improved, home buildersremained cautious, and permittingwas generally stable, averaging 410units annually from 2009 through 2014.During 2016, approximately 500 homeswere permitted (preliminary data andanalyst estimate), unchanged fromthe number permitted during 2015.A new neighborhood, Georgetown,in Okemos, Ingham County, is beingdeveloped with single-family homesfrom the high 200,000s and includes2 homes currently for sale, 12 availablelots, and 41 occupied sites in its firstphase.During the next 3 years, as the homesales market continues to recoverfrom the recent recession, demand isexpected to increase modestly eachyear, totaling 2,775 new single-familyhomes, townhomes, and condo miniumunits (Table 1). The 150 homes currently under construction will meeta portion of the forecast demand. Inaddition, some of the estimated 6,175other vacant units may reenter themarket and satisfy part of the forecastdemand. Approximately 65 percentof the demand is expected to be forhomes priced between 125,000 and 299,999. Table 4 presents detailedinformation on estimated demandfor new market-rate sales housing,by price range, in the Lansing-EastLansing HMA during the 3-yearforecast period.

10Housing Market Trends ContinuedRental housing market conditionsin the Lansing-East Lansing HMAare balanced because of improvedeconomic conditions leading tohouse hold growth, particularly ofrental households, since 2010. Thecurrent overall rental vacancy rate isestimated at 6.0 percent, down from9.0 percent in April 2010 (Figure 8).Because of the positive economic trendsand increased household growth, approximately 1,700 existing vacant andconstructed rental units have beenabsorbed since 2010. Rental householdscurrently account for approximately37.2 percent of all households in theHMA, up from 34.6 percent d uringApril 2010. As of July 2015, an esti mated 25 percent of renter householdslived in single-family homes, 52 percentFigure 8. Rental Vacancy Rates in the Lansing-East Lansing HMA,2000 to Currentwere in structures containing 5 to 49units, and 9 percent were in apartmentproperties with 50 or more units perstructure (2015 American CommunitySurvey, 1-year data). Like the overallrental market, the apartment marketalso tightened, with a vacancy rate of3.6 percent during the fourth quarterof 2016, down from 3.8 percent duringthe fourth quarter of 2015, and a rateof 5.3 percent during the first quarterof 2010 (Axiometrics, Inc.). Averageasking apartment rents in the HMAwere 869 during the fourth quarterof 2016, an increase of 5 percentfrom 826 during the fourth quarterof 2015. Despite multifamily development that has generally increasedsince 2011, the apartment vacancyrate was above 5 percent only duringthe third quarter of 2011, when itreached 5.4 percent, before droppingbelow 5 percent 010CurrentNote: The current date is January 1, 2017.Sources: 2000 and 2010—2000 Census and 2010 Census; current—estimates by analystFigure 9.

ters in Delhi Charter Township south of the city of Lansing in late 2014, adding 50 employees to date and an expected 50 more through 2017. Because of the improved economy during 2016, the unemployment rate fell to 3.8 percent, down from 4.3 percent during 2015 and the lowest average rate since 2000. Figure 2