Housing’s ‘Snowball Effect’ Not Likely
to Melt Soon
The Weather Channel has
nothing to do with it. What’s happening up in the ski resorts, likewise. The
‘snowball effect’ being discussed in print and on TV won’t soften anytime soon
(even if the groundhog was right about winter being over)..
This is an economic snowball
-- one that’s gathering momentum following what CNN’s Money website
describes as “the best year for U.S. real estate market in five years.”
Businesses that stand to benefit from growth in the Utah
housing market are watching closely.
The Wall Street Journal’s
snowball report took form in last Monday’s Marketplace
section, where the top headline read “Housing Recovery Opens Spigot…Makers of
Products From Carpets to Air Conditioners Feel Effects of Rebound.”
It was even more heartening
as a counter to last week’s government indications that the greater economy seemed to slow.
The housing sector’s performance was so strong it acted as a tonic to its many
associated industries: among them, many Utah
retailers.
The snowball
effect was noted widely. The company that makes Carrier air conditioners said
that orders rose 20%; Honeywell International reported the “first sign of life
we have had in a while.”
Locally, fingers were crossed that Utah
businesses will be swept up in the snowball. National suppliers expected that
to happen. “Housing is what we see leading the economy out of the doldrums,”
according to the CFO of United Technologies Corp. The WSJ reported
evidence that Americans are spending more to build and refurbish their
properties.
With sales of existing housing registering the largest
annual jump since 2004, it should come as no surprise if Credit Suisse’s Daniel
Oppenheim proves correct in predicting a 7%-8% rise in home improvement
spending. He expects it to keep going for at least the next two years. That’s a
pretty solid forecast, and in line with what most observers are saying.
All in all, the boost from the housing recovery is one
snowball no one seems to think is likely to melt soon -- regardless of what Punxsutawney Phil has
to say about it.
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