Aside from war stories focusing on the Middle East, and gun violence debates here in the United States, real estate has been a dominant news item for the past several years. And the real estate outlook has been mostly pessimistic.
But lately that perspective is turning away from the dark side, and letting in some light.
The National Association of Home Builders (NAHB) is forecasting 949,000 total housing starts in 2013, up 21.5 percent from 781,000 units last year.
Single-family starts are anticipated to rise 22 percent from 535,000 last year to 650,000 in 2013, Crowe said. They are expected to jump an additional 30 percent in 2014 to 844,000 units.
According to a recent story (Jan. 22, 2013) on the home builder’s website, www.hahb.org, NAHB Chief Economist David Crowe said, “Nearly every measure of housing market strength – sales, starts, prices, permits and builder confidence – has been trending upward in recent months and we expect to see gradual but steady growth along these lines in 2013,” with “house prices are up nearly 6 percent on an annualized rate over the past 10 months.”
Add to that the optimism as seen in the number of people searching for homes on the Internet, a outlook is looking rosy to many real estate professionals.
Another positive sign is statistics revealed in a joint study between the National Association of Realtors (NAR) and Google, showing real estate-related searches on Google.com have grown 253 percent over the past four years.
NAR President Gary Thomas said that Google’s results are compatible with the association’s own research.
“These results parallel the trends shown in NAR’s economic research reports,” said Thomas. “As home sales and prices continue to trend up, more people are regaining confidence to invest in their future through home ownership.”
While these reports suggest the housing market is finally showing signs of recovery, the road ahead is hardly without its challenges.
According to NAR Chief Economist Lawrence Yun in an interview during the 2012 NAR Conference and Expo in Las Vegas, concerns about President Barack Obama’s policies regarding housing are holding back housing’s growth potential.
Yun cited unemployment, a generally “sluggish” economy, and an “unprecedented housing cycle” as some of the factors impeding a stronger housing market. But, he said, people put “too much credit and too much blame” for economic conditions on the president, adding that it’s “harmful” government policies that actually have the greatest negative impact on the health of the housing market.
Policies like “limiting the mortgage interest deduction…” and “credit requirements,” that are damaging the housing recovery, said Yun.
“[We need legislation] on the positive side…such as loosening up of underwriting standards and getting more clarity” from lenders concerning lending guidelines, rather than the government offering incentives and stimulus programs.
“[They] are not needed. What’s important is to do no harm….Mortgage availability, mortgage interest deductions, and debt forgiveness” for people who find they owe more money on their house than they can sell it for in the current marketplace are more important to turn housing in the right direction than incentives.
Making [mortgage] debt “taxable,” said Yun, is akin to “kicking someone who’s already down and under tremendous stress.”
But back to the lighter side of the picture, NAHB Chief Economist Crowe said that house prices are up 6% and low mortgage rates continue to have a positive effect on housing date. But Crowe echoes some of Yun’s comments concerning the obstacles preventing more robust housing activity:
- Stubbornly tight mortgage-lending conditions
- Inaccurate appraisals
- Rising cost of materials
- Declining inventory of buildable lots.