The stories are nothing new. This or that analyst or investment advisor was either very smart or lucky and predicted an inflection point in stocks, the housing market or the overall economy.
That said, financial news network CNBC has gone to the analyst reported to have predicted a rapidly inflating housing bubble in 2005, and who now says the market began a turn for the better in 2012.
On a recent CNBC segment--with no hesitation-- Ivy Zellman of Zelman Associates predicted, “I think we’re in Nirvana for housing.”
Among Zellman’s points:
· Residential housing inventories are at 30 year lows.
· Mortgage rates are at historic lows
· Rent inflation is driving buyers into home ownership
· Consumer sentiment is increasingly positive
Zellman likened housing to a tanker that has been headed in a negative
direction for seven years and is now turning around.
She predicted that the national market could continue an upward move for the next five to six years with prices potentially increasing by 20%.
Regarding homebuilder stocks, as an investment advisor Zelman says she is reluctant to tell her clients that “we’re in the 1st or 2nd inning of housing and that it’s time to sell when there could be a runup of five to six years. Catch the video at CNBC.
On the heels of the Zelman interview March 7, CNBC’s real estate editor Diana Olick reported that new statistics show housing construction jobs are at the highest level in six years.
However, there’s a critical lack of workers to fill positions, due in part to those who left the industry for greener pastures. Many are now said to be flocking to energy boom states such as Wyoming and South Dakota.
Olick reported that housing starts are up 24% across the country, but employment for plumbers, electricians and other subcontractor fields has risen only 3%. The result is extending the completion cycle on some housing to as much as 15 months.
The situation is especially dramatic in Las Vegas, once the foreclosure capital of the country, where new housing starts among some builders are up 100%, Olick reported.
One of the problems noted in the report is that lenders have been hesitant to finance new construction in some areas, putting the squeeze on builders who need upfront capital to hire and begin construction.
The Olick report: http://goo.gl/iA7Vb
