Few of us needed a crystal ball to confirm that 2009 was a difficult year, and that our industry in Northern Nevada will continue to experience pain in 2010.  Attendees at the Builders Association of Northern Nevada’s Forecast: 2010 and Beyond, hosted by the organization’s Sales & Marketing Council, had this notion confirmed after presentations by four experts who shared their insight.
   Mark Krueger of Grubb & Ellis, brought information on land and regional development.  While statistics point to little relief until consumer confidence begins to increase and foreclosures decrease, there was some room for cautious optimism.  Northern Nevada has finally begun to work through its new home inventory, and can be expected to reach near normal levels during 2010.  Housing in the region has also become more affordable for a greater number of citizens, with more than 66% of homes sold in 2009 coming in at less than $250,000.  This is a complete reverse from the artificially high pricing of 2005, when 72% of all homes sold were more than $350,000. 
   Tim Ruffin of Colliers International shared data on the region’s commercial market, noting that 2009 set records for office vacancies (21.0%), retail vacancies (16.4%), and industrial vacancies (15.4%).  Unfortunately, the dropping values of these properties are making it more difficult for the commercial market to stabilize.  Based on average absorption rates in our area, it is expected to take 3.88 years for the commercial market to balance.
   Ken Amussen of Coldwell Banker Select lent insight on the resale market, sharing a humorous yet accurate picture of the factors affecting our recovery.  Using his “Dragons, Maidens and Myths” analogy, Ken put to rest some of the more common misconceptions about the area’s resale market.  While most feel that prices and sales continue to fall, they are in fact up over past years.  Foreclosures continue to plague the industry, but inventory is being absorbed…a necessity for recovery.  Low interest rates and housing tax credits continue to benefit sales. 
   Elliot Eisenberg, Senior Economist with the National Association of Home Builders tracked historical GDP, unemployment rates, and interest rates as he shared the national and international factors that will continue to affect the housing industry.  Lenders remain leery of making loans to builders and developers until the market stabilizes, and there is concern about what will occur when the tax credits expire.  It’s probable that federal policy may be less accommodating than in the past.  He expected Nevada will still be experiencing new home construction at less than 70% of normal by the end of 2011.

   One thing is for certain, though.  When it comes to housing and housing issues, we’re forging a new normal.  What used to be on the bottom is now on the top.  It may seem like Alice in Wonderland….but it is, in fact, the reality we’re fast becoming accustomed to.

Forecast 2010 & Beyond Recap