Housing Market Forecast: "Various Shades
October 13, 2010
"If you're in this room you get a gold star because that means
you've survived [the housing downturn and recession]." Those were
the words of Eric S. Belsky from Harvard University's Joint Center
for Housing Studies, as he addressed members of the Association
of Millwork Distributors during their annual convention taking place
this week in Charlotte, N.C. He then recapped for attendees the
dismal state of the housing market and offered some glimpses into
housing market is in various shades of lousy," he said. "We expected
a fallout after the first-time homebuyers credit expired but we
didn't expect this much [of a drop]."
Belsky addressed many reasons for the housing market collapse,
while signifying that attendees are already aware of these factors,
but still took the time to point out a variety of statistics.
"We've had an enormous inventory correction," he said. "You know
this but I want to remind you how dramatic this has been."
He pointed out that two million homes are in foreclosure, two million
more are 90-day delinquent and one-and-a-half million more are 30-
to 90-day delinquent.
"So you have this massive problem trying to work itself out," he
said. "You have a lot of distressed sales and until those are gone
we have a real problem."
Belsky said the situation "really starts to get depressing" when
you start to look at new home sales.
"You're basically in hell when it comes to new home sales," he
Regarding when the housing market will turn around, Belsky said
there are several $64,000 questions that need to be answered. For
example, he said the job market is particularly challenging for
young and minority workers and "these are the individuals that we
need to drive home sales," he said. He added that immigration has
become an increasingly important driver of household growth.
While on the surface the situation looks bleak, he said that looking
back to past housing downturns, there is reason for optimism.
"There is reason to believe we are headed out of this based on
inventory when looking back historically," he said
More reason for optimism is the fact that the number of young households
is expected to set a record by 2015. "The Echo Boom will be even
larger than the Baby Boom," he said.
While attendees of the annual convention heard some dismal housing
news, they also learned that even in a downturn there are real ways
to sell strategically and gain market share during such a time.
That was the message from Dr. Rick Johnson who gave a motivational
seminar highlighting real ways companies can compete in tough conditions.
"It's easier to gain market share during a down economy," he said,
but added, "It's not okay to just do your job during a recovery.
You wouldn't be here if you had just been doing your job in the
past few years."
A key to success, said Johnson, is employing a key team.
"If you have average employees, you aren't a good businessperson,"
He admitted that while there are major challenges the industry
is facing, "your competitors have the same problems."
"You have to be better and you have to have above-average people,"
While his presentation focused on sales, he insisted that sales
are not just up to the "salespeople." "Everybody sells," he said.
And when it comes to selling, Johnson said, "you must become a
total solutions provider. Find the customer's pain and find the
solution to take it away," he said.
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