Slow Road to RECOVERY by ProQuest


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									           Forecast 2010

       Slow Road
            to RECOVERY
                                                                                                      leads, longer lead-to-close times,         now isn’t whether things will get
         While many experts                            By John Filippelli                             smaller-ticket jobs – often at             worse,” he says, “but how quickly
                                                                                                      lower profit margins – and greater         they’ll recover.”
         foresee, at best, a

                                                             or kitchen and bath design               competition for customers.                     The extension of the $8,000
                                                             professionals, the past                      However, there are now some            first-time home buyer tax credit,
         modest recovery                                     24 months have certainly
                                                             been a test. Ongoing news
                                                                                                      encouraging signs that not only
                                                                                                      may the worst be over, but that
                                                                                                                                                 signed into law recently, is
                                                                                                                                                 expected to have a substantial
         for housing in 2010,                                reports of foreclosures,
                                                       rising unemployment rates,
                                                                                                      there’s legitimate reason for long-
                                                                                                      term optimism (see Editorial,
                                                                                                                                                 stimulative effect on home sales,
                                                                                                                                                 and should assist the nation’s
                                                       decreased consumer confidence                   Page 7).                                   housing market on the road
         kitchen and bath                              and plummeting home prices                         According to Don Sciolaro,             to recovery, according to the
                                                       have created a climate of                      CEO of the Hackettstown,                   Washington, DC-based National
         designers look to                             carefully controlled purse strings,
                                                       with product shipments down
                                                                                                      NJ-based National Kitchen & Bath
                                                                                                      Association (NKBA), economic
                                                                                                                                                 Association of Home Builders.
                                                                                                                                                     The home-buyer incentive
         turn challenges into                          significantly and a great deal of
                                                       discretionary spending on hold.
                                                                                                      indicators and many top analysts
                                                                                                      contend “that the recession is
                                                                                                                                                 extension should boost both
                                                                                                                                                 housing production and home sales
         opportunity.                                      As a result, kitchen/bath
                                                       dealers and designers have seen
                                                                                                      over – that most markets already
                                                                                                      bottomed out and are beginning
                                                                                                                                                 in 2010, according to David Crowe,
                                                                                                                                                 chief economist for the NAHB.
                                                       markedly decreased traffic, fewer              a slow recovery. So, the question          Crowe notes that the latest permit
                                                                                                                                                 patterns indicate that builders
                                                                                                                                                 “are preparing for the possibility
                                                                                                                                                 of more favorable housing market
             1. Past and Projected Figures For U.S. Housing Starts (in Thousands of Units)                                                       conditions in the future.”
                                                                                                                                                     Aided by the home-buyer tax
                                                                     2006        2007         2008         2009         2010         2011        credit, the outlook for housing and
                                                                                                                                                 the economy appears headed “for
             Single-Family Units                                     1,474        1,036        616          451          615          891        a sustainable recovery,” according
                                                                                                                                                 to the National Association of
                                                                                                                                                 Realtors (NAR). Lawrence Yun,
             Multi-Family Units                                       338         306          285          108           80          150        chief economist for the Washington,
                                                                                                                                                 DC-based NAR, projects that
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