Metrostudy's Toby Morrison, National Sales Manager and Senior Director of Insights, addresses a tendency among home building industry operators--builders, manufacturers, and suppliers--that's probably been around as long as people started trading for home sites and houses.
Optimism, or more precisely over-optimism, may look like a sign of fortitude and may be mistaken for resilience, but, says Morrison, it can be both unnecessary for survival and very stupid. Morrison looks at the perils of "over-predicting" outcomes, such as:
I will go on record here and now to tell you that we will NOT hit 1.5M housing starts next year. I don’t foresee us getting near this figure until 2018 and, even then, I don’t think we’re going to quite reach 1.5M starts. I’m not being a downer as we still expect growth but, most folks who foresee a spike are banking heavily on the millennials.To be sure, there is a lot of pent-up demand in the millennial sector. However, the options offered to the entry level group in terms of actual housing and financing are not plentiful enough to get us to 1.5M starts at the present time. Our model is currently predicting 1.185M starts in 2016 and is based upon a blend of indicators and what our 400+ researchers are seeing in the field.