The home building industry could lead the nation’s economic recovery. New homes mean new jobs…Rancon is ready to help!
Just as the real estate market took the brunt of blame for the Great Recession, the National Association of Home Builders (NAHB) and others are now predicting that the housing market, specifically the home building segment, will be the strongest part of the economy in the next few years.
Robert Dietz of US News and World Report wrote: “After years of hindering economic growth, housing added to Gross Domestic Product in 2012, an important reversal given the sector's key role in pulling the nation's economy out of the doldrums in past recessions.”
NAHB predicts that nationally all segments of the home building industry will continue grow in 2013. According to their latest Economic and Housing Forecast, new single-family homes will lead the charge with an estimated growth rate 22 percent in 2013 and a 30 percent gain in 2014. Multi-family housing starts will also grow by 22 percent in 2013, but fall to a 6 percent growth rate in 2014.
The 55-plus housing market is also coming up on the radar with a sizeable demographic moving into that category in the coming years. The NAHB report pegs growth in this segment at 21.9 percent in 2013 and 19.9 percent in 2014.
Interestingly, NAHB estimates that every single family home built in the United States creates “enough work to create three jobs.” New multi-housing starts generate one job per unit.
The rate of homeownership, interest rates and mortgage lending policies will all play a role in upswing in new housing starts. Currently, homeownership remained unchanged at 65.4 percent in 4Q12, the lowest since 1997, according to the US Census Bureau. According to a MSN Real Estate report, the lion’s share of home sales in the past year has been to investors, especially in areas hard hit by the recession. Meanwhile, the price of all segments in housing and rentals is rising.
While the decline in homeownership, especially in the 35 to 44 age range, leaves a bit of a negative connotation for new home building, there is a large segment of the population in the 45 to 64 demographic that could significantly impact the market in the next few years. According to the Eye on Housing Blog, this demographic (45 to 54 and 55 to 64) represents the largest block of current homeowners, members of which are prime candidates for “move up” demand.
“We are extremely positive about the market for new homes in the year ahead in Southern California and especially in Southwest Riverside County, and we are doing everything possible to facilitate our partners in the merchant builder community,” says Dan Stephenson, Founder and Chairman of the Rancon Group. “In the coming months, we will have several strategically located residential properties that will essentially be turn-key projects for new home builders.”
Please go to our Available Properties section of this website for more information.