Tuesday, January 25, 2011

Housing Industry Looking Much Brighter in 2011

By Julie Schmit, USA TODAY


The housing industry is poised to gain strength this year after coming off one of its worst years ever in 2010, economic forecasts and new data released Wednesday show.
One cause for optimism: Building permits for new single-family homes rose 5.5% last month, the third consecutive monthly increase and the strongest showing since March, the Commerce Department said.

That sets the stage for more home construction later this year as the economy improves, says Celia Chen, economist at Moody's Analytics.

"The trend is up," Chen says.

But it'll be a slow slog. The previous two years have been the worst on record for home builders in at least 50 years. Nationwide, home prices are down almost 30% from their 2006 peak. A new USA TODAY survey of 44 top economists finds that 48% say average home prices won't hit bottom until sometime this year, and 27% say it'll take longer.

The housing market recovery "will be two baby steps forward and one backward," says Joel Naroff, chief economist at Naroff Economic Advisors.

The theme of slow improvement is likely to be repeated in December's existing home sales data, to be reported today. A small gain is expected over November, says IHS Global Insight economist Patrick Newport.

He also says that December's permit numbers indicate that housing construction "may be set to grow again." But some of December's jump may have been driven by builders trying to get permits ahead of 2011 building code changes in California, New York and Pennsylvania, the Commerce Department said.

Newport also cautions that home-building numbers "are still really awful." Housing starts, for example, fell 4.3% in December as cold weather and snow delayed construction. But Newport says other factors will continue to depress housing starts.

Those include low prices on foreclosed homes, which makes it hard for builders to turn profits on new homes, and tight financing for home builders and buyers. What's more, the recession sharply reduced the rate of household formation, which means that more families are doubling up in homes vs. each getting their own, Newport says.

Moody's doesn't see home construction getting back to more historically normal levels until at least 2012, Chen says. USA TODAY's economist survey indicates that 669,000 new home starts are likely this year, up 15% from 2010.

The key is job creation, says Lawrence Yun, chief economist with the National Association of Realtors. When more people are working, and earning higher incomes, home buying increases. IHS expects the economy to add 2.5 million jobs this year and 2.7 million next year.

"The (housing) market appears to have hit bottom, and now we're trying to get back to normal," Yun says.

Friday, January 21, 2011

Back to the Blog!

Hey Everyone!

I have returned to my blog. Tell you the truth, I actually forgot I even had it; I couldn't even remember what blog site I used. Now that I've found it, I intend to use it and hopefully share information that will be helpful, interesting and fun to read.

As you may have noticed, my last post was in 2007 (seems like a very long time ago, especially if you are counting in real estate years). The market has been through some changes since then (most people are trying to forget them) but it's important to stay ahead of the market and I feel like we were able to do that; I had my most productive years since 2007 and I'm happy to say I've helped many new clients as well as repeat clients with all their real estate needs. 2010 was a great year, but I am really looking forward to 2011. Our office has already seen a boost in activity since the first of the year, there's more people out looking to buy and sellers are feeling a little more confident. We're excited about the future! I'll be updating you on the Richmond, VA housing market over the next few weeks, so keep checking back in so you stay ahead of the game!

Best,

Graham