Six years ago, when the market was flying down the road in overdrive, economist Mark Zandi drew the ire of home builders when he predicted housing was about to drive off a cliff. Now, Zandi's singing a different tune. And the builders love it.
"I'm optimistic and I'm confident that everything seems to be falling into place for a better economy and a better housing market," the chief economist at Moody's Analytics proclaimed at the National Association of Home Builders' annual spring construction forecast conference in Washington, D.C.
The rub? The bust won't end until this time next year, Zandi offered. But if housing interests can hold out until then, he added, construction "will ramp up in earnest."
Zandi's forecast squares with the NAHB's. "Momentum will begin to build as we get into 2012," Chief Economist David Crowe predicted. "And by the end of the year, we should be back to where we were at the beginning of 2007."
Crowe isn't looking for any increase in single-family housing starts this year, none at all. But he sees a 51% jump next year, from 471,000 to 698,000. That's a far cry from the 1.26 million houses builders averaged every year between 1995 and 2003. But most builders will be happy to wake up from their coma, even if they have to remain in sleep-mode for another 12 months or so.
Apartment builders will put up 140,000 units this year, according to NAHB's estimates. That's up 23% from 114,000 last year. And Crowe is predicting a bigger 25% jump this year, to 175,00. That would be back to the same level as building were producing in late 2009. But during the 95-03 period, they were building more than twice that many.
The NAHB economist is expecting a "nice uptick" in both new and existing home sales. "But it will be a slow one," he added.
Zandi, meanwhile, told the meeting, which has been turned into a two-hour webinar, that the market is poised to "pop," ending a six-year-long nosedive that will see values drop 35%, peak to trough.