Bill McBride of Calculated Risk offers his Thoughts on Residential Investment Recovery
This is a must-read post. Here is a brief summary:
• Residential investment (RI) is the best leading indicator for the economy. This isn't perfect - nothing is - but RI is usually a strong leading indicator for the business cycle....
• In 2011, residential investment will make a positive contribution to the economy for the first time since 2005....
• ...As the excess supply is absorbed, new residential investment will increase in some areas – and will probably return to normal sometime in 2014 - or as late as 2017 - depending on the actual number of excess vacant housing units. I'm leaning more towards 2015 or 2016...
The housing crisis is still very much with us.
