“More Housing Forecasts”

by CalculatedRisk on 1/11/2012 09:48:

Two Housing forecasts:

From Merrill Lynch on Housing "It is too early to get bullish"

We expect single family housing starts to be little changed in 2012 relative to 2011. This will continue the sideways movement which began in 2009 after single family housing starts plunged 80% from the peak...

The good news is that builders have been successful at reducing inventory, bringing new supply to 6 months. This means that any increase in demand will warrant a new housing start. If the economy recovers more quickly this year than we assume, single family housing starts will receive a boost.

And real estate consultant John Burns is forecasting an increase to 359 thousand new home sales in 2012 (from around 300 thousand in 2011), and for total starts to increase to 717 thousand from around 600 thousand in 2011 (this includes a significant increase in multifamily starts).

A small increase in new home sales and housing starts is likely in 2012. The increase in sales in 2012 will not be huge; even a 20% increase in new home sales would make 2012 the third lowest on record behind 2011 and 2010.

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