The housing market is showing signs of revival, a Harvard research center says, and that could be good news for the boating industry because some experts say it will take a housing rebound to kick-start a more robust recovery in luxury sectors such as boats.
“After several false starts there is reason to believe that 2012 will mark the beginning of a true housing market recovery,” said the State of the Nation’s Housing report, which was released today by the Joint Center for Housing Studies of Harvard University.
“While still in the early innings of a housing recovery, rental markets have turned the corner, home sales are strengthening, and a floor is beginning to form under home prices,” said Eric S. Belsky, the center’s managing director.
Rental markets are on the mend, thanks to sharp drops in construction and an increase of more than 4.4 million renters since 2005, the study showed. Rental vacancy rates are falling, rents are increasing, and multifamily construction is up solidly. In contrast, the nation’s homeownership rate continues to slide.
“With new home inventories at record lows, unless the broader economy goes into a tailspin, stronger sales should further stabilize prices and pave the way for a pickup in single-family housing construction over the course of 2012,” Belsky said.
The sentiment seemed to align with what many in the boating industry have said about their own sales.
“I think this summer is going to be better than last summer in terms of sales,” National Marine Manufacturers Association president Thom Dammrich told Soundings Trade Only. “If all the other things start to improve — if housing starts to improve and confidence grows — the boating industry will follow.”
As in the marine industry, many would-be home buyers “have stayed on the sidelines, waiting for the job outlook to improve and house prices to stop falling,” Belsky said. “But as markets tighten, these fence-sitters may begin to take advantage of today’s lower home prices and unusually low mortgage rates.”
With rents up, home prices sharply down and mortgage interest rates at record lows, monthly mortgage costs, relative to monthly rents, have not been this favorable since the early 1970s.
Boatbuilders and dealers have been awaiting this shift.
“I think the housing market needs to straighten out before the boating market gets back to some sense of normalcy,” Correct Craft president and CEO Bill Yeargin told Soundings Trade Only. “That might take a couple more years.”
— Reagan Haynes