Chief Economist David Crowe and his fellow presenters at NAHB's fall construction forecasting event carried a mostly upbeat tone. The focus of the event was regarding the housing industry and the evolution of housing finance policies. The speakers noted that the most recent data seems to be "in sync" with the notion that a recovery is truly underway. Much of the multifamily and single family remodeling has made considerable progress toward returning to pre-down turn levels. Stating that remodeling is already back to 100% of production relative to 2000-2002 spending and multifamily is at 64%, and single family is around 40% of normal production. However, Crowe noted that weak job growth, credit issues, and appraisal problems continue to slow the pace of recovery. This forecast is contingent on Congress coming up with a solution to avoid the "fiscal cliff" posed by mandated government spending cuts.
This year, Crowe is projecting that single-family starts will finish this year at 528,000 units, then rise 26% to 665,000 units in 2013 and another 30% to 865,000 units in 2014. Meanwhile, he expects multifamily starts to finish 2012 with 224,000 units, followed by a modest rise to 238,000 units in 2013 and another gain to 275,000 units in 2014.
The longest to recover will be the local markets, because those were the hardest hit in the housing downturn.
Areas that are at "normal" housing production levels include North Dakota, Washington, D.C., and parts of Wyoming and Texas.
For more information or to read the full article please see NAHB Monday Morning.
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