An economic and housing upturn is lurking somewhere in the future. With hope, new government plans and economic resources could make it happen sooner rather than later.
Where is the Potential?
BusinessWeek said that “housing starts are expected to jump to 980,000 units next year, and S&P economists are forecasting a 13.3 percent pickup in residential construction in 2010” as a result of population and housing growth as Millennials enter the market, in addition to growing immigration numbers.
Despite consumer confidence hitting record lows in 2008, U.S. retailers reported a surprise boost in consumer spending. January sales among U.S. retailers were up (albeit only slightly), breaking a record stretch of six months of declines.
Government Economic and Housing Plans
In February, President Obama signed into law a $787 billion economic stimulus package designed to strengthen the housing industry and national economy.
Homebuyer Tax Credit
An $8,000 first-time homebuyer tax credit for qualified home purchases in 2009 designed to encourage prospective home buyers to get off the fence because the tax credit:
- Does not have to be repaid
- Is fully refundable
- Will remain in effect until Dec. 1 so consumers can utilize it during critical home buying months
- Allows tax credit home buyers to participate in the mortgage revenue bond program
What does this mean for professionals in the home and building channel?
Bad news . . .
- Builder and consumer confidence remains at record lows.
- Unemployment will likely rise throughout the year, which is a major factor for late mortgage payments.
- A decline in home values makes it a good time for buyers, but not for sellers.
- It will be at least nine months before the housing market stabilizes.
- The nationwide recession is going to get worse before it gets better.
Good News . . .
- It’s a buyer’s market. With the $8,000 tax credit available until November 2009, in addition to affordable housing values, there are many incentives for homebuyers seeking a first-time or new home.
- Millennials and immigration trends will cause a rise in population and housing growth as they come of home buyer age.
- “Responsible” homeowners can refinance their mortgages at historic low rates.
- Some have the opportunity to renegotiate their mortgages with lenders.
Business and Marketing Tips for Business Leaders
Fear and anxiety can paralyze a brand. It’s imperative to think positive and long-term.
- Take advantage of the government stimulus plans
- Market to new homebuyers; focus on Millennials and immigrants
- Know your target audience(s)—their motivating factors, how they buy and how to appeal to them.
- Focus specifically on value. Demonstrate benefits and added value in your marketing messages to achieve market share growth.
- Limit the fluff and communicate clearly with pointed and direct messages.
- Effectively utilize and engage your employees.