by Bill McBride on 1/11/2012 09:48:00 PM
Wednesday, January 11, 2012
Last week I posted some housing forecasts from Wells Fargo, Goldman Sachs and Fannie Mae: Some Housing Forecasts.
Here are two more 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...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).
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 comments from homebuilders Lennar and Toll Brothers:
From Reuters: Lennar Says High Rents Helped Home Orders Increase 20%
“As I look ahead to 2012, I am cautiously optimistic that we are seeing a real bottom form and we will begin to see signs of recovery,” Lennar’s chief executive, Stuart A. Miller, said in a conference call.From Bloomberg: Toll Brothers: NYC Best Home Market in ’12
Lennar said high rents were driving customers to buy new homes, and low home prices and low interest rates were helping.
The company is experiencing more traffic at its model homes, Mr. Miller said.
Nationwide, Toll Brothers expects to sell “not that much more” than 2,600 homes in 2012, [Chief Executive Officer Douglas Yearley Jr.] said in today’s interview. If the traditional spring selling season is strong, the company could deliver as many 3,200 houses this year, he said. The company sold 2,611 homes in fiscal 2011 ...As I noted last week, I think 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.
Posted by Bill McBride on 1/11/2012 09:48:00 PM