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News for Product Manufacturers from Hanley Wood CEO Frank Anton
Put on Your Rose-Colored Glasses
Conventional wisdom has it that this recession will wipe out conspicuous consumption for a generation or more. I don't buy that. When the economy and the job market improve, I think American consumers, who can, will flock back to Tiffany and BMW dealers. What I've been worried about is how this recession, and more particularly the housing industry shipwreck, could affect home buyers' attitudes and decisions to buy or not to buy in the foreseeable future. Could they be so spooked by housing price declines and the foreclosure crisis that they'll be reluctant to buy a new house no matter how good their personal financial situation may be?
After reviewing the results of Fannie Mae's recent National Housing Survey, I feel much better.
Let me highlight some of the key findings:
- More than 80 percent of Americans believe homeownership is important to the economy.
- About two-thirds think now (right now) is a good time to buy, and one-third think it's a very good time to buy.
- Almost 90 percent agree that owning a home makes more sense than renting.
- Close to 80 percent of those surveyed believe housing prices will remain the same or go up in the next 12 months.
- Finally, seven in 10 of all Americans — and interestingly even six in 10 of those who are delinquent on their mortgage payments — think buying a house is a safe investment. On one hand, that's down from eight in 10 of all Americans in 2003, when the housing boom really began. On the other hand, only one in six Americans think buying stock is a safe investment.
To put all of this another way, it now seems clear that, for most Americans, this recession and the attendant collapse of the housing industry have not turned the American dream of homeownership into a terrible nightmare. It also suggests, to me, that when the economy and the job market do recover, home buyers, like Tiffany shoppers, will quickly come back out of hiding, and the housing recovery could be more robust than most forecasters are predicting.
P.S.: To review the complete Fannie Mae Survey, go to this Web address.
Send e-mail to Frank Anton |
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News and Trends from Hanley Wood Magazines
Special Issue: Home Performance
The remodeling industry is changing, and change is uncomfortable. But with change comes opportunity for growth and diversification. REMODELING magazine's look at the Home Star energy retrofit bill covers the types of work it involves, certification requirements, franchising opportunities, financing options, and the tools needed for diagnostic testing. (REMODELING, June 2010)
How to Sell Green
Green features can be the deciding factor in a home purchase, as buyers learn to translate green into monthly cost savings and a distinctive quality of life advantage. (BIG BUILDER, June 2010)
Special Report: Local Leaders
While builders across the country continued to suffer in 2009, buyer demand actually picked up in some markets. (BUILDER, June 2010)
Class Act
The materials that pro dealers order and stock dwarf every other expense item in their budgets. Here's leading advice that tells them how to manage that inventory to produce maximum profit. (ProSales, June/July 2010)
2010 residential architect design awards
Residential architects whose names are among this year's winners shouldn't feel lucky -- they should feel proud. Fewer than 3 percent of the 978 entries are listed here, making RADA the most competitive housing design program in the country. (residential architect, May-June 2010)
Innovative Products 2010
JLC's annual collection of problem-solving tools and materials. (JOURNAL OF LIGHT CONSTRUCTION, July 2010)
Special Report: The CONCRETE CONSTRUCTION 100
After poring over the numbers for months, one expression that could be used to describe the companies that comprise the CONCRETE CONSTRUCTION 100 list may be: Survival of the fittest. (CONCRETE CONSTRUCTION, July 2010)
Creative Construction
As prices for building materials increase, developers look for ways to reduce costs. (MULTIFAMILY EXECUTIVE, July 2010) |
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Top Developments Affecting the Nation's Biggest Public Builders
New-Home Sales Stronger Than Expected in June
Sales pace rises 23.6 percent to 330,000-unit level, which is still relatively slow.
NVR Reports $71 Million Profit
NVR Inc. reported a profit of $ $71.2 million for the second quarter ended June 30 ($11.13 per diluted share), an increase of 72 percent over last year's second quarter, beating handily the consensus Wall Street estimate of $8.62.
Recovery in Spending on Remodeling Forecast To Start This Fall
Harvard's Joint Center for Housing Studies expects year-to-year decline through this summer.
New-Home Builders Try New Tactics to Win Share from Resale Real Estate
Most of the ones we're talking with believe that the fourth quarter of 2010 will mark the moment housing will begin to walk on its own feet for the first time since "subprime meltdown" became a Google search term.
BFS' 2Q Loss Holds Steady Despite 20.5% Sales Jump
Volatile prices, stiff competition reduce gross margins.
Labor Prices Help New Construction Deals Pencil Out
And after three years of virtually no new construction, developers see a not-too-distant future where rents and values will soar due to undersupply.
Effects of Healthcare Reform on Senior Housing
Recent study gives prediction for the future of senior multifamily sector.
Alex Wilson Receives the 2010 Hanley Award for Vision and Leadership in Sustainable Housing
Annual $50,000 award from The Hanley Foundation and EcoHome recognizes visionary environmental building editor, educator, and advocate.
NAHB Report: Home Builders Turning to Remodeling, Land Development in Downturn
Nearly three-quarters of NAHB members built 10 or fewer single-family homes in 2009.
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Housing Statistics and Analysis from Hanley Wood Market Intelligence
- Existing home sales declined 5.1 percent from May levels to 5.37 million units. Existing single-family home sales declined 5.6 percernt from last month to 4.7 million units, while existing condo and co-op sales fell 1.5 percent from May levels to 670,000 units. Existing home sales are still up 9.8 percent from the same year-ago period and have now recorded year-over-year increases in 12 consecutive months. Although home sales have declined as expected following the expiration of the home buyer tax credit at the end of April, they have come in higher than most economists have expected, which is a positive sign. Record-low mortgage rates have helped keep demand elevated in the resale market.
- Median existing home prices in June increased again to their highest level since October 2008. The median sales price for an existing home increased to $183,700 from $174,600 in May. Median existing home prices are up 1.05 percent from June of last year. This is the fourth straight month that existing home prices have recorded a year-over-year increase. Firmer prices despite slower sales activity and the expiration of the home buyer tax credit are a positive sign for the housing market going forward.
- Existing home inventory increased 2.5 percent from the previous month to 3.992 million units. Existing home inventory levels have posted increases in four out of the past five months and remain at historically high levels. Existing home inventory levels are 4.7 percent higher than they were this time last year. An increase in units for sale along with slower sales activity pushed months of inventory to 8.9 months, which is the highest it has been since August 2009.
- Housing starts fell for the second straight month following the expiration of the federal home buyer tax credit at the end of April. Total housing starts fell another 5 percent in June following a 14.9-percent drop in May to a seasonally adjusted annual rate of 549,000 units. This is the slowest annual pace for total housing starts since October 2009. Single-family housing starts eased 0.7 percent to a seasonally adjusted annual pace of 454,000 units in June, while multifamily starts fell 21.5 percent to a seasonally adjusted annual pace of 95,000 units last month.
- Total building permit activity increased 2.1 percent in June due to a rise in multifamily issuances, while single-family activity remained weak for the second straight month. Single-family permit activity fell 3.4 percent from the previous month to a seasonally adjusted annual pace of 421,000 units, while multifamily permit activity jumped 19.6 percent to a seasonally adjusted annual pace of 165,000 units.
For more from Hanley Wood Market Intelligence, vist our Web site. |
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