Outlook Conference Speakers Say Future Housing Outlook is Positive
October 21, 2009
Some speakers at last weeks Construction Outlook Conference,
sponsored by McGraw Hill Construction, indicated that the recession
is over but one speaker was still cautious about the future.
David Wyss, chief economist for Standard and Poors, gave
an Economic Outlook Presentation in which he said the rally
will continue, but the long-term cycle probably has
another bear in it.
also said the recession could be longer and deeper if the following
- Financial markets lock up again;
- Home prices continue to fall; and
- Oil prices continue to rise.
He did add, however, that fiscal stimulus will support the recovery.
Status of Homebuilding Market
Kermit Baker, chief economist for the American Institute of Architects,
offered the Outlook for Residential Homebuilding and Remodeling
and he was more positive about the future, specifically of the residential
A slow recovery is better than no recovery, said Baker.
you didnt know it before, now you know how closely the economy
is tied to housing, he added. Its difficult for
the economy to recover without housing helping out.
Overall, Baker said the long-term prospects for housing are favorable.
He said the housing market appears to be recovering but excess
inventory needs to be worked off and prices need to stabilize before
we see a full-blown home building expansion. This excessive
inventory is a moving target, according to Baker, as foreclosures
keep getting added to it.
He says a big indicator of a future upturn in housing is related
to household growth--almost 15 millionnew households are coming
in the next decade.
The coming decade is shaping up to be a strong
one in terms of housing, said Baker.
interesting trend he noted revolves around how the housing market
has affected design.
When the downturn hit, builders began building smaller homes,
he said. This seems to be more widespread than in previous
recessions. This wont change even as the market recovers.
He adds that special features are becoming less common but ones
that remain popular are those that accommodate special needs/accessibility,
etc. And one room that homeowners keep adding on is the home office.
Status of Remodeling Market
Baker said that the remodeling market has fared better than housing
but it is down as well, though that is starting to change.
There are signs that recovery is starting to occur in some
segments, he said. The pendulum is starting to swing
back and the market is looking more like it did in the mid-90s.
We are at or near the cyclical low and should see recovery
at the beginning of next year for remodeling, he added.
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