Future Looks Murky for Homebuilders


Even though home sales are improving and prices are increasing, the outlook for homebuilders doesn’t seem to be heading in the same direction. Moody’s Investor Service, in fact, recently reported that it expects homebuilder companies’ numbers to decrease by approximately 8% in the upcoming year.

Moody’s expects the overall housing market to find itself in a better situation, but combined with the hits the building industry has taken in the past few years, the forecast isn’t so positive. The service predicts that homebuilders will still suffer an overall loss in 2010. Moody’s further predicts that these losses may linger into the first half of 2011 as well–even as the market works toward recovery.

And as is often seen when it comes to adverse market conditions, things may get worse before they get better. With an increase in unemployment malingering foreclosures, further housing price decreases may be just around the corner—and for a period that is longer than what was originally expected by analysts.

Moody’s and other services do expect the overall housing market to take a positive turn, but there are some obstacles it still has to overcome–obstacles that may make the recovery a more long-term than short-term process.

Those doing the best in this market are the folks who’ve been using their homes to pay for their homes. Yes. Using the equity in their home to pay off their mortgage principal. The result? They can buy more real estate, always a good investment when entered into correctly. Especially when prices are low. Smart investors will snap up homes they can rent as affordable housing and still make a handsome profit. Watch a video presentation of how to pay off your home years sooner.

One Response to “Future Looks Murky for Homebuilders”

  • Dorian says:

    “I honestly think it has less to do with the csnepeahs of the workers, rather than the smartness (or lack thereof) of the American worker. Let’s face it, our education system is awful. I know of employers that simply can’t find qualified Americans to fill the most, especially in Science. The salaries are the same, generally, wether a US born citizen fills the post over a foreign born one.”Bull. Salaries are being driven down through this program. I am an American tech worker – I am unemployed. I am getting really crummy salary offers far below what I got 5 years ago. Why? Because they know that if I don’t take the job, then they can claim they “couldn’t find” a qualified American to do the work. So they import some lesser skilled indian at 1/3 the price. This artificially inflates the supply and undermines my bargaining position. Indian workers are not “better” – they are often worse due to cultural mismatch. They are cheaper because the ones that come here are typically very young, used to living frugally and the money they send home goes VERY far with their family in India.Meanwhile, lots of top quality Americans have left the tech industry over the last 5 years because of this dynamic. They would come back if it became lucrative again. But our costs are higher – we need more money to live. I’m sick of the myth of the ‘superior indian’. Back it up. Publish all positions filled by H1B workers. Allow any American to challenge for the worker’s job at any time. I think we’ll be finding a lot of Indians heading home. I won’t have any trouble sending back any of the ones I’ve met.

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