The construction industry gain quite a bit of traction in 2015, a trend that should continue well into next year, a trio of chief economists from three respected building industry firms said.

This year has been good to the construction industry, and 2016 should be better, a trio of economists representing prominent building firms said in a recent forecasting webinar.

Associated Builders and Contractors (ABC) chief economist Anirban Basu, American Institute of Architects (AIA) chief economist Kermit Baker and National Association of Home Builders (NAHB) chief economist David Crowe each predicted that the current expansion trend in the construction industry would continue and even strengthen next year.

"The nonresidential construction sector gained momentum over the last year and should continue to expand into 2016," Basu said.

Low materials prices, and federal budgeting and monetary police issues aided building firms this year. But the lack of a skilled labor force will continue to challenge the industry moving forward.

"The ABC predicts the nonresidential construction segment will experience 7 percent nominal growth in 2016," Basu said.

Spending on home improvements is poised to reach an all-time high by the end of 2015, Baker said. "The office and retail sectors are expected to lead the commercial real estate market in 2016, with near double-digit increases in construction spending expected."

And residential construction has been gradually recovering, a trend that should pick up speed next year, Crowe said.

"Steady employment and economic growth, along with attractive mortgage rates and home prices will keep the sector on an upward trajectory as we go forward," Crowe added. "However, persistent headwinds including labor and lot shortages will continue to hinder a more robust recovery."

Source: For Construction Pros
Website link: https://tinyurl.com/p3heuma



Zillow: October Sales Forecast Just So-So
Zillow, the real estate marketer and research firm, said sales of existing and new homes have moved in opposite directions for the last two months. It expects more of the same in October, with no real notable rise in sales anytime soon.

Sales of existing homes are expected to fall nearly 2 percent to 5.45 million units, while sales of new homes are anticipated to climb 5.3 percent to nearly 494,000 units, both in October.

"For the past two months, existing and new home sales have moved in opposite directions: When one has gone up, the other has gone down," Zillow said. "We don't expect this pattern to change when October home sales data is released next month."

Zillow also doesn't believe home sales will do anything dramatic anytime soon.

In July 2015, combined existing and new home sales eclipsed the 6 million mark for the first time since May 2007. "Since then, they have flitted back and forth across that threshold "?u falling below it in August, rising back above it in September and, by our estimates, likely falling below it again come October," Zillow said.

Zillow noted that the 6 million mark was hit routinely during the late 1990s and early 2000s, just before the housing boom in the mid-2000s.

And there are now about 4.5 home sales (both existing and new) for every 100 households.

"This is well above the recent 2010 low of three sales per 100 households, but also well below the peak of seven sales per 100 households observed in late summer 2005," Zillow said. "It is also roughly in line with the historic average of 4.4 sales per 100 households that prevailed between 1985 and 1999 "?u a period of generally stable housing markets nationwide."

With about 2.3 million existing and new homes for sale at the end of September, Zillow said: "This translates into two homes for sale for every 100 households, or 5.5 homes for sale for every renter household.

"This is slightly below rates that prevailed in the late 1990s, when there were about 2.2 homes for sale for every 100 households and 6.7 homes for sale for every 100-renter households."

Source: Zillow
Website link: https://tinyurl.com/pqtgxyo