At the International Builders’ Show we released our latest “Home Building Outlook” report as well as the forecast for residential remodeling and replacement activity in 2012. For the first time in seven years, we expect 2012 to be positive for all types of residential construction. Since we are coming off record lows, the levels we expect to reach are not impressive by historical standards, but up is still better than down.
And more importantly, as construction drags itself off the bottom, it will begin to have a positive impact on the broader economy, restarting a virtuous cycle of growth that will benefit construction even more in 2013. The growth expected in the best markets for 2012 illustrates the impact that new construction has on the economy.
We are forecasting average growth of 26 percent in new-home sales in the five highest ranked home building markets. That amounts to over 3,000 additional new-home sales in just those five markets over 2011. At average new-home prices in those markets, additional sales will come to over $1 billion.
Those incremental dollars have a major impact on not just the local builders and remodelers but also the local contractors and suppliers and the building product manufacturers whose materials will go into those new or remodeled homes. These estimates don’t include the impact that the activity has on related businesses.