With spring selling season giving builders a gauge of what the year will hold, Big Builder Online asked its readers to forecast sales volumes through the end of the year and into 2012.
For 2011 sales, there's only slight optimism that volumes will be better than in 2010, with 30.4% of respondents projecting slightly better sales volumes and 4.3% expecting significantly better volumes. However, 40.6% of Big Builder survey respondents said they expect volumes to remain flat, while 20.3% project slightly lower volumes and 4.3% project significantly lower volumes.
Job uncertainly or instability, fear of home prices falling, and the inability to obtain financing are the major factors responsible for holding back sales volumes in 2011, according to survey respondents. Other respondents noted that continued foreclosures depressing prices and buyers looking to scale up or down not able to sell their existing homes also are factors in lower sales volumes.
Asked if the typical production builder (those selling more than 100 homes per year) can survive another year in a less-than-350,000 new-home sales environment, almost half of the respondents--46.4%--said maybe, but they think it's going to be a tough struggle. However, 36.2% of respondents were optimistic, saying they think the majority of builders in business today have right-sized their businesses to survive another low-volume year. The remaining 17.4% said they think a lot of builders squeaked through 2010 but probably can't handle another year of depressed volumes.
Looking ahead, 52.2% of respondents said they expect new-home sales to recover significantly next year and are hoping 2012 will bring stronger job growth, fewer foreclosures, improved consumer confidence, and decreased existing-home inventory.
However, 26.1% of respondents are still unsure of what 2012 will hold, and 21.7% said they do not expect to see new-home sales recover more significantly in the new year.