Economic recovery will be in full swing by October 2012. Why? Because there is a presidential election in November 2012. This is America. This is the way it works.
Inventory is coming down in many markets, according to just about any report we read these days, and hopefully employment opportunities will grow not only for those out of work, but for the millions who are underemployed.
This time around, an important marketing segment and a proven marketing tool will have an immeasurable influence on the intensity and speed of the recovery. Neither was available for the last recession’s recovery.
A little known "shadow market" of up to 3 million households
According to David Crowe, chief economist for the National Association of Home Builders, there are as many as 3 million "unformed households," as some who in better times would be living on their own are now living with parents and friends.
These are families who lost homes and jobs, and those entry-level job seekers who cannot find a job. They represent both renters and potential homebuyers who will purchase when able.
The world has never experienced an economic recovery with a marketing tool as affordable, flexible and as powerful as the Internet. News and opinions about sales, incentives, jobs, new products and such are instantly shared with millions worldwide.
There was an air of hope and optimism in the air at the International Builders’ Show in Orlando, Fla., last week. Then, like an unpopular boss dropping in on an employee birthday party, Federal Reserve Chairman Ben Bernanke dropped by to give his report to the nation’s homebuilders.
With the exception of a comment about natural disasters, he could have given the same report last year. Or so it seemed. I could not help but wonder, as I listened to his speech, if Washington truly cannot see the forest for the trees.
Is the housing picture so big and so ugly that Washington does not truly understand that new construction is the sight and sound of an economic recovery?
Homebuilders are not asking for a handout or a bailout. All they are asking is there be some loosening of credit so those who would like to purchase a new home can buy one.
New home construction is about a lot more than "housing." It is about jobs, supplies, vendors, increased tax revenue. For every 100 new homes constructed, three new jobs are created, NAHB reports, and most of the products used in home construction and remodeling are manufactured in the United States.
It is also a fact that some proactive real estate agents are doing quite well — among them those who are specializing in property management, short sales and foreclosures.
Some real estate licensing schools are reporting substantial improvement in their enrollments.
Ron Climer, owner of Climer Real Estate School in Orlando, said that enrollment in his Florida real estate license classes is up more than 30 percent over the same period in 2011. His classes were averaging 15 students per class, he said, but now the enrollment is closer to 20-25.
Are these students coming from the ranks of the unemployed?
According to Climer, some of his students are underemployed or underpaid for what they do, and sense improving opportunities in real estate.
Carol Kemp, owner of Central Florida Real Estate School in Orlando, agrees with Climer. "January was a pleasant surprise. Our enrollment grew at about the same pace," Kemp said, and February is looking good.
Auto sales, manufacturing and consumer confidence can be encouraging indicators of an improving economy. But none compares to mood music generated by the sound of hammers, saws and electric drills as new homes are constructed in local neighborhoods.
Based on my experience with four recessions, look for continued economic improvement, new housing permits to continue to outpace 2011 on a quarterly basis, and prices to stabilize.
In the meantime, if you’re in real estate sales you might want to stop by a new-homes sale office to see how the on-site consultants are feeling about things, what kind of financing the builder is offering, and what the commission policy is.
You are going to need to know, sooner rather than later, for no other reason, perhaps, than this is what happens during a presidential election year.
Many of us are feeling better, and more hopeful, now that our sick economy is on the mend, that’s for sure.
And no matter how we feel about the treatment, we are happy to see that the "patient" is getting better.