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Are You a Sandbagger?
Frank Anton / Hanley Wood / October 2012
If you budgeted at all aggressively either this year or last year—and were disappointed—I can understand why you’d be inclined to be cautious about budgeting for next year. But let me make the case for poking your head out of your sandbagged bunker and taking a fresh look at the housing market.
Do that, and you’ll see that every single important economic metric for housing that you’d want to be up is up and that every single metric that you’d want to be down is declining. Going up are: housing prices (almost everywhere); new and existing home sales; housing starts and permits; housing affordability (at the highest level since at least 1971); consumer and builder confidence; household formations; remodeling activity; and apartment rents. Going down are: unemployment rates (finally below 8 percent); foreclosure rates; apartment vacancy rates; the inventory of unsold existing and new homes (at the lowest level ever); and mortgage interest rates ( also at the lowest level ever).
But maybe you subscribe to the theory that statistics lie and liars use statistics. If that’s the case, then consider this: your customers—builders big and small, single family and multi-family, remodelers, residential and commercial architects, and building products dealers—are for the first time in a long time decidedly optimistic.
In the last 60 days Hanley Wood surveyed some 2000 of your customers, and about 2/3 indicated they expected their company revenue to increase by 10 percent or more next year. Builders were the most optimistic, estimating they would start 20 percent more units in 2013. Overall those surveyed saw remodeling, move up housing and multi-family construction as the biggest areas of opportunity. Fewer than 10 percent of those surveyed expected their businesses to decline next year.
If you would like to see a copy of the executive summary of the research and/or a full set of the tabular results, send me an email (email@example.com). I think it will boost your confidence about where housing is headed in 2013.
See and hear Frank Anton’s views via our Frank Talk Video Webcast.