Not long ago I was sitting in Starbucks talking to a rather depressed individual who sold floor tiles for the construction trade, most of what he specialized was the tiles under the final flooring. He said he was glad he’d retired back in 2007 and that the building industry just collapsed in late 2008. He said it’s been a tough go ever since, and that he expected things to rebound in 2012 and that 2011 would be the proverbial “rebuilding year” using a sports team analogy. So, is this true, “will 2011 really be a Rebuilding Year in the Construction Industry?”
Many believe so, in fact there was a rather interesting article in the Wall Street Journal titled “Recovery In Building Is Forecast For 2011” by A.D. Pruitt (published on October 29, 2010). In the article was cited a McGraw Hill study, but indeed I have to disagree with one of the comments, as they believe that 2011 in the residential building sector will see a strong recovery, greatest increase in percentage in decades. I do not concur, and point to the massive “sludge of foreclosures behind the dam” as another (financial planning and amateur market analyst) acquaintance of mine likes to call it.
You see, if we have continued slow recovery, we have will have continued foreclosures, and right now 60% of all residential real estate sales are REOs, foreclosures, or distressed short-sales where the bank and the home owner are in trouble, upside down, and no place to go with it. For a much longer dialogue on this I can recommend that you go to Active Rain, and look at some of the blogs of real estate professionals on the front line and hear what they are saying, along with their attempt to put a positive spin on a continuing “inception” driven nightmare.
Yes, I guess you could call 2011 a rebuilding year in the building and construction industry, but it’s going to be another tough grind and if you are a contractor, well, hang tough, it ain’t going to be a pretty one. Please consider all this.