Has Housing Plummet Struck Bottom or Is A Shadow Looming?

One of the first rules of market research is to consider the source. So, when trying to decide which side is right in the housing bottom debate – the optimists who say that the freefall in prices and sales has ended or the naysayers who focus on the shadow inventory of foreclosed and underwater homes – it is important to remember this rule. 

In an article headlined “Homes Selling More Quickly, Time on Market Down with Tighter Supplies,” economist Lawrence Yun shows that he is in the former camp. “A notable shortening of time on market began this spring, and this has created a general balance between home buyers and sellers in much of the country.”

Yun’s employer is the National Association of Realtors®, who would like nothing more than to see the housing crisis nightmare end. Not only does Yun argue that the price dive has reversed itself, he cautions that a housing shortage may be in the offing.

“Ironically, if housing construction doesn’t pick up to normal levels within two years, supply shortages could be sustained for an extended period and lead to above average appreciation,” Yun said. “Therefore, any unnecessary hindrance to housing starts, such as excessive local zoning regulations or stringent bank capital rules for construction loans, should be carefully re-examined.”

Not everyone shares this outlook. A June 26 article on the Forbes magazine web site reports “10 Million Underwater Mortgages And Shadow Inventory Worth $246B Mean Housing Trouble.”

The lead paragraph under this ominous headline begins, “Don’t be so sure the housing market is on its way back to health.  Despite the first monthly increase in home prices in 7 months, as the Case-Shiller indexes showed on [6/26/12], there are still more than 10 million properties with underwater mortgages, and a shadow inventory of 1.5 million, or four months supply.  Negative equity will continue to take its toll on consumption, while the shadow inventory, worth about $246 billion according to CoreLogic, will constrict lending and probably affect banks’ earnings.”

What could Forbes’ motive be for the negative spin? It’s hard to say, but Charles Tatum, a cynical reporter played by Kirk

Douglas in a 1951 film called “Ace in the Hole,” said, “Bad news sells best.” Trust me, it’s a credo that many newspapers and magazines live by.

This is not to suggest that either of these organizations are being dishonest or falsifying data to achieve the results they want. Both viewpoints are well supported by facts. It’s just how they choose to interpret these facts and data that the researcher must question.

An objective look at this issue suggests that the truth – as is often the case – likely lies somewhere in the middle.

The residential market’s importance to the overall health of the AEC industry and U.S. economy is a major theme in our upcoming release – The 2013 Guide to the U.S. AEC Markets. Even firms that don’t work in the single-family or multifamily residential space are significantly affected by its performance. Retail isn’t the only development sector that follows rooftops.

For each market and subsector, we include a graphical breakdown of the current state of the market, the outlook and other important information (see the Multifamily example below). This is in addition to pages of narrative, tables and charts, insightful quotes and other important information that fills this 200-plus page book.

Multifamily Capsule 

About Our Book

The 2013 Guide to the U.S. AEC Markets will examine these issues – and many more – in far greater depth. The soon-to-be-published comprehensive report will include a review of the sector-by-sector projections from the 2012 forecast, as well as:

  • Dozens of interviews with leaders and experts in the markets served by architects, engineers, environmental consultants and contractors.
  • Ten industry trends (and what they mean to you)
  • A recap of 2012 and the U.S. Economic Overview for 2013
  • A U.S. geographic outlook, regionally and state by state
  • Discussion of passed, pending and potential legislation that could affect the AEC industry in 2013
  • A look at the post-election AEC industry from both sides of the aisle
  • Most promising international markets and regions
  • The 2013 outlook for over 25 major markets and subsectors
  • Ranking of the hottest and coldest markets for 2013
  • More than 20 pages of links, articles and other resources for firms to consult and use in their own research

Buyers will also receive quarterly Updates of fresh market data and industry developments. These 20-plus-page reports will ensure that the 2013 Guide will prove its worth all year long. 

The list price for the pdf-only version of The 2013 Guide to the U.S. AEC Markets is $299, but right now, you can get the prepublication price of $225. (Hard copy price is $279 prepublication, $349 list.) As always, we offer a full refund guarantee; so there’s no risk to you.

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Table of Contents for The 2013 Guide
to the U.S. AEC Markets (Working)

Part 1: Introduction: A Time Like We’ve Never Seen Before

Part 2: Ten Trends in the Industry

Part 3: The U.S. Economy: Is the Recovery Finally Here?

Part 4: Election 2012: What it Means to You

Part 5: The Geographic Markets in the U.S.

Part 6: The International Markets: Beyond BRIC

Part 7: U.S. Market Outlook for 2013

  • Introduction
    • Demographics
    • Methodology
  • Residential Outlook
    • Single Family
    • Multifamily/Senior Housing
  • Commercial Outlook
    • Office
    • Retail
    • Hospitality
    • Industrial/Warehouse
  • Manufacturing
  • Institutional
    • Health Care
    • Higher Ed
    • K-12
    • Science/Technology
    • Government Buildings
  • Transportation
    • Roads/Bridges
    • Aviation
    • Rail
    • Ports/Shipping
  • Water/Wastewater
    • Water Supply
    • Wastewater Treatment
    • Storm Water Management
  • Energy
    • Renewable
    • Non-Renewable
  • Environmental
    • Solid Waste
    • Hazardous Waste
    • Air Pollution
    • Testing & Analytical Services

Part 8: Best & Worst U.S. Markets for 2013

Appendix: Resources & Links

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