What’s Gonna Happen THIS Year?
In the November 2009 issue of Big Grower, regular contributor Dr. Charlie Hall at Texas A&M University wrote about how critical the housing market is to the overall recovery of the economy. Boy, is it ever.
As 2009 came to a close, USA Today was reporting that existing home sales were tracking at their highest pace in more than two years. However, according to Dr. Hall, the sales of new homes and new home construction seemed to “hit a speed bump” (see “Recovery: Not for the Faint-Hearted,” page 18). Here’s my question: Is the glass half full or half empty…or is the glass too big?
Questions for 2010
Things aren’t as bad as they were earlier in 2009, and there does seem to be some relief in sight, but the housing market in 2010 will still be a pretty big question mark. What’s going to happen this year?
One challenge facing many homeowners is that since 2005, the median price for existing homes has dropped nearly 30 percent. Many experts expect the slide in housing prices to continue and don’t foresee any kind of a rebound until the end of this year — and an even bigger rebound is predicted for 2012.
Another daunting challenge facing the housing market is the unemployment rate. In December, the unemployment rate was still around 10 percent, it is expected to drop to 9 percent by the end of this year and settle around 8 percent in 2011. The unemployment rate will have an impact on home foreclosures as long as workers continue to lose their jobs.
While these challenges are still very real, they shouldn’t be as bad this year as they were in 2009.
Let’s Hear It for Spring
According to one expert, things are definitely looking up. In mid-December, Dr. Lawrence Yun, senior vice president and chief economist for the National Association of Realtors, spoke to a gathering of real estate professionals: “I think the bottom of the housing market has already occurred,” he said. “Prices are lower compared to a year ago, but things have stabilized. With the homebuyer tax credit, the market should be even stronger in the spring buying season.”
If Dr. Yun is correct — and I hope he is — growers should also see the benefits of the strong spring home buying season as all of these new homeowners look for green goods to enhance their new purchases and enjoy the lifestyle that plants offer.
What are your customers telling you about the spring season? What is the state of the housing market in your region? Drop me a line at firstname.lastname@example.org and tell me what you think is going to happen this year.