Dec 20 2007 12:22PM | Permalink | Email this | Comments (0) |
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I just got off of the NAHB year-end economic forecast teleconference and I guess you could call it a mixed bag of O-K to Oh-my-God.

For remodeling, the news isn't too bad. Chief economist David Seiders said the NAHB is expecting this year will end up being down about 5 percent from 2006, with a similar or smaller drop next year. The good news is that things should improve during 2008, with the 2009 numbers matching 2006's record levels of remodeling, with pretty steady growth going forward. 

The ever-increasing housing stock and age of that stock makes remodeling a "freight train" with a lot of forward momentum, Seiders said. This momentum should lead to remodeling becoming a bigger and bigger segment of the residential market. 

While hard data isn't available yet, Seiders said he suspects that a lot of the shortfall this year is coming from bigger projects. This is due in large part to problems in the lending industry and falling home prices, which have made it more difficult for homeowners to finance projects.

As for new construction ... not so good. NAHB is predicting that we haven't hit the bottom yet. Seiders said that should come in the second quarter of 2008, when housing starts will be down about 55 percent from their 2006 peak. Home sales are also expected down next year before rebounding in 2009. Total residential fixed investment (which includes new construction, remodeling, real estate commissions, etc.) is predicted to drop 17 percent next year, before increasing by 6.5 in 2009.