Continued high unemployment and a lack of demand for new homes will keep any housing recovery at bay until the end of 2012, according to one real estate strategy firm. The Concord Group also expects the seemingly ever-growing inventory of distressed properties to create challenges for a recovery, as well. “We believe job growth in 2011-2012 coupled with limited delivery of new lots will create faster absorption and a rapid demand for new home supplies,” said Andrew Borsanyi, principal at The Concord Group and co-author of the report. The company expects some markets to improve faster than others, specifically San Diego, San Jose, Calif., and Orange County, Calif. The strong growth in demographic characteristics, recovering reemployment levels and structurally low inventory should benefit these three Golden State markets by the middle of this year. A few larger cities – Dallas, Denver, Seattle and Washington – should see recoveries in land sales by the end of 2011 with increases in new home sales by the end of next year, which is in line with the firm’s estimates for the nation as a whole. Meanwhile, markets such as Las Vegas and Phoenix will continue to experience high unemployment, a high level of foreclosures, and lot oversupply that combined project to keep recovery lagging in those areas. “Recovery has been slowed in part due to the drop in new home demand following the expiration of the government’s tax credit, continued economic uncertainty and the competition from distressed inventory,” said Richard Gollis, principal and co-founder of The Concord Group. Write to Jason Philyaw.
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