There was cause for optimism that conditions were improving a few months ago, as builder confidence rose in November on news of upward bumps in starts, sales, and residential permits the previous month. The latest data also showed the country’s unsold and “shadow” housing inventory receding.

But the market has made teasing gestures toward recovery several times before, only to disappoint again. And seeing brighter days in 2013 requires some mental gymnastics when:

  • Home sales in 2011 were expected to plummet to record lows;

  • One-quarter of 25- to 34-year-olds—the core of the first-time buyer cohort—is living with parents, 15 percent can’t find work, and many are drowning in college loan debt, which at $859 billion in November exceeded America’s total credit-card debt; and

  • The nation’s unemployment rate is likely to hover above 8 percent two more years.

“The housing market will get a little better next year [2012] and a lot better in 2013, but that’s not saying much,” says IHS Global Insight’s U.S. economist Patrick Newport, “because 2011 [had] some of the worst numbers we’ve ever seen.” Robert Curran, Fitch Ratings’ lead home building analyst, notes that many of the soothsayers who are hopeful about 2013 “predicted the same thing for 2009, 2010, and 2011. “I’m a big believer in pent-up demand and that people who want to buy homes eventually will. But economists are looking for a V-shaped recovery when a jaw-toothed recovery with some modest improvement is more likely.”

Nevertheless, some forecasters can envision GDP growth that’s just strong enough to stimulate job creation to where consumers get back into the home buying arena, and builders start building again in less-anemic numbers. A gravy boat, with its gradual undulation and narrow spout, is the vessel that symbolizes these analysts’ projections.

Learn more about markets featured in this article: New York, NY, Washington, DC, Naples, FL.