Big Builder Online recently asked readers about their expectations for 2010 and received its share of optimistic and pessimistic predictions for the year.
Respondents' major predictions for the year varied. "Recovery will click in the third quarter as credit loosens," said one respondent. Another was just as optimistic: "Credit markets will begin to stabilize and lending will begin to resume by the end of the year." Others predicted positive signs for home builder stocks, and one respondent predicted a major builder going under or being acquired.
On the less optimistic side, a few respondents predicted more bank failures and the problems in the commercial real estate sector will continue to drag down the home building sector.
More than half of respondents--57.1%--said housing will be on par with 2009.
"Even though spec levels have come down in the marketplace, ongoing new foreclosures and short sales will continue to become additional inventory to the market," noted one respondent.
However, the remainder of the respondents were split evenly: 21.4% predicted this will be the recovery year, and 21.4% predicted that it's going to be tougher than 2009.
But 46.4% of respondents were somewhat optimistic on where new-home sales numbers will go, saying they expected them to steadily improve throughout the year, and 10.7% said they expected to see the numbers improve through the new tax credit expiration and then decline. However, 32.1% of respondents said they expect the sales numbers to stay flat with 2009, and 10.7% said they expect to see a steady decline.
As for home builders seeing a return to profitability in 2010, more than half of respondents--53.6%--said no. However, 32.1% of respondents said they do think most home builders will see a return to profitability, while 14.3% of respondents were still on the fence on the issue.
Almost half of the respondents--46.4%--said they think the No. 1 investment for home builders most likely will be land in 2010, followed by design(21.4%) and talent (10.7%).
But what will have the largest effect on home builder businesses this year?A quarter of the respondents predicted rising foreclosures, followed by availability of mortgage financing (21.4%), shifting consumer demand (14.3%), government intervention/legislation (14.3%), capital access (10.7%), volatility of interest rates (3.6%), and change in competitive landscape (3.6%).