Get Ready for Slowdown

From After ten months of high single digit to low double-digit growth in housing sales, the next six months will likely see a slowing in the year over year unit sales across the country.  Why?  First, this year’s results will be compared against sales levels that were already improving a year ago.  Secondly, the economy is showing signs of slowing with retail sales down three months in a row, unemployment rates up slightly and growth in personal income also slowing.

At the start of this year most forecasts of housing sales for 2012 said that unit sales would be up by single digit rates and flat prices.  We continue to believe that on a national basis the increase in unit sales will end up in the high single digit area while price increases will be a bit better than forecast.  In addition to general economic challenges, the main reasons for a slowdown are the lack of inventory for sale in most markets and stringent mortgage lending requirements just now beginning to be felt.

It is not a time to panic.  It is a time to focus on the fundamentals of taking care of customers and your teams of sales professionals and leadership teams.