2013: On the Rebound
During the most troubled times of the recession, many viewed the real estate market, including land, as all but destroyed.
But the recession wasn't a quiet time for all real estate investors. Companies across the nation, particularly publicly traded firms, began investing in land deep within the recession. For many of these companies, getting into the land game early has paid off.
Some large companies saw an opportunity as the housing industry reeled from an economic meltdown and began investing for the future housing boom. During these times of woe, land was cheap. Struggling developers began offloading property with bargain deals in an attempt to stay afloat. And for the nation's biggest builders, it was a time for major spending-an amount between $500 million to $1 billion sunk into land investment.
It's not only the big players who invested in raw land. Other builders have done similar things, just scaled down and not as aggressively. And now that the housing market has turned a corner and the pace of sales has gone up, it seems that what was once viewed as premature is going to work out brilliantly for America's top builders.
For the second half of 2012, hints at a broader rebound for housing markets began to take shape with customer polling, statistical projections, and anecdotal evidence. Builders lifted up their feet and restarted mothballed projects and began to emerge in abandoned markets. In fact, on a national level, annualized housing starts in November ran 22 percent ahead of the same month back in 2011. And for reluctant buyers, the Federal Reserve's promise to keep mortgage interest rates low may offer a nudge.
Now you'll find that almost every housing industry association, economist, and analyst foresees a major boost in construction and sales for the next couple of years, particularly throughout 2014.
December of 2012 saw construction spending continuing on its upward trek, registering its ninth consecutive month of improvement with a 0.9 percent boost for the month and a 7.8 percent annual gain, according to information released Feb 1st by the U.S. Census Bureau. Private construction is also up, thanks to a strong surge from multi family spending, which jumped 6.2 percent. It appears that for 2013, multifamily buildings will lead the U.S. building industry, contributing to housing growth significantly.
The economy is improving, and coupled with growing employment, more people will likely begin to shift from sharing residences to strike it out on their own.