Demand Institute climbs aboard the housing-turnaround bandwagon

Let’s welcome The Demand Institute to the club of organizations recognizing the housing recovery.

According to a report from the organization — a non-profit organization that tracks consumer demand (it’s run by the Conference Board and Nielsen) — “U.S. Housing Market Finally Reaches a Turning Point.” (Link is to PDF.)

Home valuations will start to climb again while adjacent consumer industries will capture significant new growth opportunities in 2012 and beyond as the U.S. housing market finally turns the corner.

Of course, no report would be complete without specific predictions, and the Demand Institute has them:

  • Average home prices will increase by up to 1 percent in the second half of 2012.
  • By 2014, home prices will increase by as much as 2.5 percent.
  • From 2015 to 2017, the study projects annual increases between 3 and 4 percent.
  • This recovery will not be uniform across the country, and the strongest markets could capture average gains of 5 percent or more in the coming years.

Oooookay. Me, I wouldn’t be comfortable predicting out to 2017 (other than to suggest you might see the lights go out on Broadway), but it’s getting harder to argue about what’s happening now.

What else is in the report? It’s quite positive about the rental market — which it expects will lead the recovery — and young people especially will fuel that market. That, in turn, will help clear the oversupply of existing homes.

The other major predictions are fairly obvious. “The housing market recovery will not be uniform across the country,” for example, and “The average size of the American home will shrink.” (And my favorite — one that will never, ever be wrong: “Consumer industries including financial services, home furnishings, home remodeling will all experience shifts in demand and new growth opportunities.”)

Still, despite some hard-to-miss conclusions, it’s a worthwhile report to peruse.

Click here for the summary release.

Click here for the full PDF report.

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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