Market is in eye of the beholder
f you're a builder, next year looks like 2003, a record year. If
you're a home buyer, next year looks like 2007, the year after the
housing market peaked.
So who's right?
Both perspectives are.
Market is in eye of beholder By Sally Duros If you're a builder, next year looks like 2003, a record year. If you're a home buyer, next year looks like 2007, the year after the housing market peaked.So who's right?
Both perspectives are.
"Different people will see a different story depending on where they focus their attention," says Michael Miller, a macro economist and an associate professor of economics with DePaul University. "There are indicators. You have to take all these tea leaves, and make them into a story that says where are we and where we are going?"
Strong year in 2007?
To the builders speaking at a recent panel discussion on the 2007 new-housing market, key indicators are pointing to a very strong year in 2007. They say Chicago is looking at 36,000 housing starts in 2007, a number that we last recorded in 2003, a record year.
"We are slightly better than 2003," says Patrick Curran, president of West Point Builders, in Tinley Park. "We are not worried about 3 percent growth. There are buyers out there, but they are more cautious."
Dave Smith, vice president of marketing for Cambridge Homes in Libertyville, concurred, as did Bob Meyn, vice president of sales and marketing for Ryland Homes in East Dundee.
It's not surprising that the major players in the industry -- builders, developers, Realtors and mortgage brokers -- agree that the sky is not falling. But does that translate into a new day for home buyers?
"I think it has been decided in the academic press that there was no nationwide bubble," Miller says. "Inventories are not in trouble. Labor is not in trouble. People can find jobs. Inflation seems to be under control.
"It does seem that the Fed is in good hands," he said. "The economy is stronger than people make it out be."
Most agree that Chicago's dynamic, diverse economy with healthy job growth of a projected 40,000 to 60,000 jobs is a buffer.
So why aren't the buyers out there buying?
"That's a sign of consumer sentiment. People are not confident," Miller said. "We currently have an inverted yield curve. Every recession since 1950 has been preceded by an inverted yield curve. And it is a sign that the economy could possibly fall into recession."
