New York City -- The theme of the 2011 Building and Infrastructure Conference was posed as a question: "Is the recovery upon us?"
The answer was a variation of, "well, sort of."
At the 2011 Building and Infrastructure Conference hosted by Lincoln International and L.E.K. Consulting, keynote speaker John Burns, said the long-term prospects are bright for building products, but there are some caveats. Construction will double, said Burns, president and CEO of John Burns Real Estate Consulting, but not until 2015. He used the phrase "slow churn" to describe the recovery.
And for historical precedent, he looked at the long declines in housing that hit Houston in the 1980s and Southern California in the 1990s -- both regions took several years to recover from the kind of unprecedented housing slump that the national market is currently working through.
Burns said job growth will be the key to the return. "It's not housing leading us out, it's the economy leading us out," said Burns.
On a regional basis, Burns pointed to Texas, New England and Florida as areas leading the recovery and adding jobs. At the other end of the spectrum California is struggling, he said (with exceptions, including Orange County).
The recovery in building product sales is being weighed down by certain factors, including the 5 million delinquent homeowners who have little hope of remaining in their homes, he said. Of the 55 million mortgages in the U.S., 5 million are more than 90 days delinquent, he said.
Another concern is that new home sales are low, despite extremely attractive levels of affordability and low interest rates. For those selling houses, expect another 3.5 years of "pain," Burns said.