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Housing Report through November: Grim but Improving
Some of the excess inventory has cleared out, but housing permits down 27%; better news for remodeling and non-residential construction spending
As 2009 comes to a close, we can see just how bleak the year was in the housing market, but there is hope.
Most indicators continue to show slow improvement -- or, at least, stabilization -- in housing starts, sales and prices.
It's clear that the $8,000 first-time home buyer tax credit (now extended until 4/30/10 and expanded to make more potential buyers eligible) has provided a significant incentive for purchase, and has helped clear out much of the excess inventory. Consequently, (some) builders have started to cautiously ramp up production -- but from still-depressed levels.
The most positive of the housing market indicators is the National Association of Realtors (NAR) tally of existing home sales: Year-to-date totals are now higher than a year ago in all regions. This can be attributed in large part to the tax credit -- and to the fact that about one-third of all existing homes sold during 2009 have been foreclosed or otherwise 'distressed' properties, according to the NAR.
The most negative current indicators involve multifamily housing. For-sale multifamily properties (condos/co-ops) continue to be in excess supply, particularly in markets like Florida, Arizona, Nevada and California, while rental properties are under pressure because of high vacancy rates and competition from the tax incentives available only to home buyers.
Consensus forecasts continue to look for 2010 housing starts to be 30% to 35% higher than this year -- although the predicted total is still expected to fall well short of 2008's less-than-stellar total of 906,000 units (which itself was 50% lower than 2006's peak level).
Moving in the right direction, but grounds for only cautious optimism in the short-term -- unless the strength and sustainability of the economic recovery exceeds current expectations.
Electronic House Expo Spring 2010: The New Opportunities Show, March 25-27, 2010, Orlando, Fla.
Smart Energy | Commercial | Home Health Tech | Recurring Revenue | Digital Content | Retrofit
FREE CEDIA training with New Opportunities Pass
Register by Dec. 31, 2009 and save $50.
http://www.ehxweb.com
Most indicators continue to show slow improvement -- or, at least, stabilization -- in housing starts, sales and prices.
It's clear that the $8,000 first-time home buyer tax credit (now extended until 4/30/10 and expanded to make more potential buyers eligible) has provided a significant incentive for purchase, and has helped clear out much of the excess inventory. Consequently, (some) builders have started to cautiously ramp up production -- but from still-depressed levels.
The most positive of the housing market indicators is the National Association of Realtors (NAR) tally of existing home sales: Year-to-date totals are now higher than a year ago in all regions. This can be attributed in large part to the tax credit -- and to the fact that about one-third of all existing homes sold during 2009 have been foreclosed or otherwise 'distressed' properties, according to the NAR.
The most negative current indicators involve multifamily housing. For-sale multifamily properties (condos/co-ops) continue to be in excess supply, particularly in markets like Florida, Arizona, Nevada and California, while rental properties are under pressure because of high vacancy rates and competition from the tax incentives available only to home buyers.
Consensus forecasts continue to look for 2010 housing starts to be 30% to 35% higher than this year -- although the predicted total is still expected to fall well short of 2008's less-than-stellar total of 906,000 units (which itself was 50% lower than 2006's peak level).
Moving in the right direction, but grounds for only cautious optimism in the short-term -- unless the strength and sustainability of the economic recovery exceeds current expectations.
Housing Market Highlights
- The total number of residential units permitted throughout the United .States during the first 11 months of 2009 was 38.5% less than over January-November of 2008.
- Permits for single-family homes declined 26.6% over the first eleven months of this year, while the number of units (apartments/condos) permitted in multifamily buildings was 59.7% less over the January-November period of 2009 than through the first 11 months of 2008.
- Residential construction spending overall through October 2009 is down 30% from the year-prior period, with single-family homes taking the biggest hit -- a 46% decline in spending. Multifamily construction spending dropped nearly 31%. If there is a bright spot: spending on residential remodeling is down only about 7%.
- Non-residential construction spending through October of this year is down 3.7% versus the same period in 2009.
Electronic House Expo Spring 2010: The New Opportunities Show, March 25-27, 2010, Orlando, Fla.
Smart Energy | Commercial | Home Health Tech | Recurring Revenue | Digital Content | Retrofit
FREE CEDIA training with New Opportunities Pass
Register by Dec. 31, 2009 and save $50.
http://www.ehxweb.com
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