New Home Price Projections

New Home Price Projections

In preparing revenue projections for budget planning, many builders rely upon past trends to forecast price increases for future years. This method turns out to be very misleading after the enormous price fluctuations of 2004-2011.  A ten year trend of average price changes from 2001-2010 produces an overall average of 2.7 percent, whereas the ten years of steady growth from 1994 through 2003 provides an overall average of 4.7 percent (median of 4.4 percent) – a 74 percent differential, within a range of 3-6 percent.  The 1994-2003 period following the recession of 1990-91 is a reasonable model for recovery from the 2007-09 recession despite the lingering effects of unemployment and financial credit.  We can expect some similar opportunities in the coming decade.

Contact Parker Associates at www.parkerassociates.com for more information or email info@parkerassociates.com.

Housing Outlook

Housing Outlook

NAHB Chief Economist David Crowe indicated that the building industry soon should be seeing tangible signs of improvement. Speaking at the Annual Construction Forecast Conference in April, Crowe cited positive factors such as affordability, favorable mortgage rates, tiny inventories of newly-built homes, declining vacancy rates, and pent-up demand caused by delayed household formations. “By the end of 2012, I expect new-home sales and starts to be back to where they were around the beginning of the recession in late 2007,” Crowe stated.  He was even more positive about multi-family demand, projecting a 23 percent increase in 2011 starts, followed by greater gains in 2012.

Contact Parker Associates at www.parkerassociates.com or email info@parkerassociates.com for more information.

Gross Domestic Product Growth

Gross Domestic Product Growth

Positive signs of economic recovery were reported by U.S. GDP growth in the first quarter of 2011.  Despite the limitations of poor weather, high gasoline prices and slower consumer spending, strong job increases reinforce other factors supporting a sustainable  economic recovery.   Substantial private-sector contributions to economic expansion continue to increase the prospects for 2011 growth.

Contact Parker Associates for more information at info@parkerassociates.com.

Profit Opportunities Still Available

Profit Opportunities Still Available

Despite the length of the Great Recession and its lingering tail, development opportunities of unusual value still come to Parker Associates on a weekly frequency.  If you are in the real estate investment market, please contact one of our senior associates to review our files on available opportunities.  “Tell us of your primary interest area and we will respond promptly,” states Senior Associate Chris Parker.