Although Robert Murray, vice president of economic affairs for McGraw Hill, cautioned that “there’s still a lot of uncertainty in the market,” during his forecast for the McGraw Hill Construction Outlook Executive Conference on October 29, his predictions for single-family housing construction were optimistic.

For 2011, single-family housing is predicted to see a 25-percent increase in new construction starts, and nonresidential is expected to see an 8-percent in crease, even factoring in the dour situation for institutional buildings (a 2-percent decline is predicted in 2011).

According to Murray single-family housing remains “in stalled mode” here at the end of 2010. He pointed to some improvement in overall activity earlier in the year, followed by a drop as the homebuyer tax credit expired.

“There’s still a lot of uncertainty in the market,” he said, pointing to difficulties in getting funds for homebuyers and developers alike. Murray also expects the overall number of foreclosures this year to top last year’s amount.

Home prices not going to start picking up until perhaps the fourth quarter 2011, Murray predicted. Still, he forecasted a 4-percent gain for 2010. Although he called that “very low activity,” he noted, “inventory does seem to be moving in the right direction.” For 2011, he expects a much more significant increase—25-percent—in single-family housing starts.

He attributes that optimistic prediction to several trends. Among them, he notes that demographic demand for single-family housing “is significantly higher than what we’re actually seeing,” pointing to the number of individuals poised to become first-time homebuyers as a result of temptingly low interest rates. “Certainly the potential is there to head upward.”

Multi-family housing was one of the pleasant surprises of 2010, Murray noted. Last year he had predicted a slight increase of 5 percent, which became a 9 percent increase in actuality. That segment is expected to see further growth in the area of 24 percent in 2011. Among the hot spots for this segment, based on construction starts in 2010, are New York, followed by Washington, D.C., Boston, Houston and Chicago.


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