6) Residential Investment: Residential investment (RI) picked was up solidly in 2012 and 2013. Note: RI is mostly investment in new single family structures, multifamily structures, home improvement and commissions on existing home sales. Even with the recent increases, RI is still at a historical low level. How much will RI increase in 2014?
A: Rather a lot really. The category of deferred maintenance in particular will be fueled by residential reinvestment and increased materials prices. The rule of thumb is that repair costs 3-4 times what upkeep costs and there has been a lot of ignored upkeep.
7) House Prices: It appears house prices - as measured by the national repeat sales index (Case-Shiller, CoreLogic) - will be up about 12% or so in 2013. What will happen with house prices in 2014?
A: Momentum will carry through until the spring selling season where flat to slightly down will continue through summer. By then it will all depend upon any Fed response to the stalling market.
8) Housing Credit: Will we see easier mortgage lending in 2014? Will we see positive mortgage equity withdrawal (MEW) after six years of negative MEW?
A: Yes. If only for the reason of long time owners using equity to buy a downsized home and then renting out the original property in the good school district where you raised the kids now gone. Renting the Dawghaus would yield enough to keep paying off the place and buy another more modest abode.
9) Housing Inventory: It appears housing inventory bottomed in early 2013. Will inventory increase in 2014, and, if so, by how much?
A: Y-o-y listings will grow steadily but slowly through the spring selling season and then get the same clamp we see now at a maybe 10%+ 2013 through the rest of the year. Again depending upon the Fed response to slowing in the second half.
Coming up: Bill's final question. Deserving of an entire post all its own.