The year-end housing forecast by the National Association of Home Builders (NAHB) contained some dire possibilities for 2009, with a nationwide recession and a wave of foreclosures looming in the foreground. But NAHB’s chief economist said he believes that the federal government will take the necessary measures to aid economic recovery, leading to an improvement in home sales by the second half of 2008.
“It’s touchy, but I think we’ll get through it without an actual recession,” said David Seiders, speaking in a teleconference on Dec. 20.
Seiders noted that there are still 2.1 million unsold homes (new and existing) on the market, and he expects to see further erosion of home prices through 2008. Single-family starts are down 55 percent from their peak in early 2006, although multi-family housing has declined only 25 percent during that same period. Apartment construction is outpacing all other types of residential construction, he noted.
Growth in housing starts will begin when “residential fixed income” -- a number that combines housing starts, new and existing home sales, manufactured home production and remodeling activity -- stops contracting, Seiders said.
“This will be a much more gradual recovery than the ones we’ve seen in the past,” added Jerry Howard, CEO and executive vp-NAHB, who joined Seiders on the call. “Overheated” markets like Florida and Nevada may not show any meaningful increases in residential construction, Howard warned.
On the remodeling front, Seiders predicted a 5 percent decline in 2008 with a recovery starting in 2009. “This market by its very nature ... is growing all the time, so there’s more to remodel all the time,” he observed. “In the future, remodeling will be grabbing bigger and bigger pieces of the overall construction activity market.”