We’ve all received a number of big residential outlooks and predictions this week — some just today, as industry players like McGraw-Hill Construction and the Commerce Department weighed in on the current and future housing situation.
Commenting on the residential decline is nothing new; but within these takes was hope — some actual positive findings that indicate improvement to balance out the negative — making this series of forecasts more encouraging than most from the past six months. And that’s newsworthy, indeed.
The picture this week’s data painted, in fact, was somewhat rosier than many people — possibly even the news sources themselves — anticipated.
Some news, ranging from the least to the most encouraging:
- The bad news: The New York Times reported real estate wealth in the U.S. will likely drop by $2 to $4 trillion, and that the effects of the subprime market issues could cost financial firms more than the savings and loan fallout in the
early 1990s. That’s more than we all thought.
- The not-so-bad news: The summer housing situation was worse than we thought, too, according to the Commerce Department, who said today revised data from the months preceding August showed housing sales to be much lower than originally calculated. (Good thing it’s fall!) However, home sales in September were up 4.8 percent. Are happy home days here — or near — again?
- The almost good news: According to the Wall Street Journal, McGraw-Hill Construction said it expects residential construction spending to see less declines than it did this year and that total construction spending will drop just 2 percent in 2008 (as opposed to a projected 8 percent this year.) (That’s almost confetti-worthy.)
Are things great? No. Are things getting slightly better? It would seem so.
The housing slump is going to go on for awhile. Experts keep adding months (and quarters) to their estimates. And big-picture views show a less sunny image: For example home sales, while up last month, are still down for the year.
Which is no huge surprise. No one expects dancing in the streets because construction spending will still go down, but will fall less than this year, in 2008. And no one expects the housing slump to end overnight — it certainly didn’t start that way.
Yet maybe we should focus on the faint circle of tunnel-ending light in this week’s news. Enthusiasm and industry confidence declined gradually during the start of the slump; and now it seems optimism is slowly rising the same way.
And that’s more than enough to make us focus on the positive today.