Housing Giants - August 11, 2008 - (Page 14) market By John Burns and Chris Porter, John Burns Real Estate Consulting Rising DemanD, shRinking supply a pRecuRsoR to a national RecoveRy Learn what to look for in local stats on listings and sales volumes statistics. Then consider the right risks. For those oF you who are still struggling to repay your lenders, this positive news isn’t going to help you. For those of you who have started new companies or are planning for the day when a profitable business model returns, your patience is being rewarded. The “falling knife” is getting closer to the ground, and the land acquisition opportunities of a decade are just around the corner. We are seeing the beginning of the road to recovery. In the worst markets in the country, demand for housing is bottoming out and supply is topping out. However, prices will continue to fall until demand and supply come back into balance. The best measure of balance will be when the months’ supply of new and resale homes returns to normal levels in each market. A full national recovery looks like it will take several years, with sluggish job growth preventing a strong demand recovery, and mortgage distress preventing a strong supply recovery. The markets with the strongest economies and the least resale market distress should recover first. That market does not exist today, but there are several where conditions are no longer worsening. Our national survey shows that Orlando, Fla., achieved stability recently. We are reticent to call a bottom in Orlando until the stability is proven out over a longer-time period, and the important summer months show strong tourism. 14 housING GIANts.8.11.08 www.housINGGIANts.com http://www.realestateconsulting.com http://www.housinggiants.com
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