See the complete list of trends that we analyze.

1) Introduction to the Real Estate and Construction Industry:

Real estate, the residential sector in particular, has been making bleak headlines around the globe in 2008 and 2009. By early 2010, real estate had improved in some markets in the U.S., while real estate had enjoyed a significant boom in China, Canada and a few other select spots. Several important trends will shape the real estate industry of the near future.

During most of the 2001–2007 period, easy availability of development loans and mortgages, low interest rates, eager investors and unbridled optimism caused massive new developments of homes, shopping centers and office buildings to sprout on a global basis. The effect was widespread. For example, large portions of the national economies of Dubai, Ireland and Spain were driven by real estate speculation and investment. By 2009, however, Dubai had been forced to turn to neighboring nations for backup central bank funds. Ireland’s real estate market spiraled downward. In Spain, where millions of workers had been added to construction and real estate positions in the previous decade, unemployment soared to more than 17% and remains stubbornly high.

Residential housing markets in America have been dismal. The hardest-hit sector may have been high rise condominiums, where new projects far exceeded potential demand by consumers. For February, 2009, the widely watched Case Shiller Index of home prices in the U.S. showed that prices in 20 of America’s largest metropolitan areas had declined an average of 30.7% from their 2006 peak. Home prices in the Phoenix, Arizona area were down by 50.8%. In Miami, where tens of thousands of new high rise condominiums had broken ground in recent years, the drop was 45.1%. In Las Vegas, also home to vast numbers of new condominiums, the drop was 48.4% from peak prices.

For 2010, the National Association of Realtors estimates existing home sales in America will climb to 5.02 million from 4.69 million in 2009 and 4.91 million in 2008. These numbers remain down dramatically from 6.48 million existing homes sold in 2006. In total, the real estate and construction sectors, including the many professions and fields associated with them, make up one of the larger components of the global economy.

As of 2009, the U.S. Bureau of Labor estimates that 6.0 million Americans were employed in the construction industry, down from 7.2 million in 2008 and 7.6 million in 2007. The agency also estimates that 1.4 million Americans were employed in the real estate industry as of 2009, down from 1.5 million in 2008 and 1.5 million in 2007.

About $846.2 billion in new construction was put in place at a seasonally-adjusted annual rate as of February 2010, according to the U.S. Bureau of the Census. This was down from the 2006 yearly peak of $1.16 trillion.

There was $14.3 trillion in outstanding mortgage debt in America at year-end 2009, down from $14.6 trillion one year earlier, including $10.8 trillion in home mortgages (down from $11.0 trillion). However, many home mortgages remained in arrears as 2010 began, and mortgage owners will continue to suffer write downs to some degree.

Sales of newly-built, single-family homes plummeted to about 374,000 in 2009 from 485,000 in 2008 (according to the U.S. Bureau of the Census). These numbers are an immense reduction from the 1.05 million sold in 2006.

Clearly, homebuilders have been suffering. For example, Pulte Homes, Inc., one of the world’s largest builders of new homes, saw its revenues soar from $8.8 billion in 2003 to $14.5 billion at its peak in 2005. In 2007-2008 the bottom fell out. Pulte’s revenues dropped to $9.1 billion in 2007, with a net loss of $2.2 billion. Revenues dropped even further in 2008 to $6.1 billion, with a net loss recorded for the year of $1.4 billion. Now renamed PulteGroup after a merger with Centex, business remains dull. PulteGroup’s 2009 revenues were only $3.9 billion and large losses continued.

On the opposite end of the spectrum, luxury home builder Toll Brothers saw sales rocket from $2.7 billion in 2003 to $6.1 billion at its peak in 2006. Buyers of these expensive homes (averaging about $688,000 during the boom) found it incredibly easy to get a mortgage, often a mortgage that they couldn’t afford in the long run. For 2009, Toll Brothers’ revenues were only $1.7 billion and the firm recorded a $755 million loss.

In the U.S., during 2009, only 433,600 single family homes were started, according to the Census Bureau (down from 622,000 in 2008). This is a stunning decrease form the 1.75 million new homes started in America in 2005 during the boom.

As of April 2010, the Mortgage Bankers Association forecast new single-family housing starts to total only 556,000 for 2010, growing to 790,000 in 2011 and 1,058,000 in 2012.

Many owners of retail centers and malls were hit hard by the recession. General Growth Properties, Inc., America’s second largest mall operator, filed bankruptcy in early 2009. The company had been unable to refinance its massive mortgages as they came due. At $27.3 billion, this was the largest bankruptcy in U.S. real estate history.

Commercial construction spending was at record levels for several years. Private sector (non-governmental), non-residential construction put in place in the U.S. reached $357 billion in 2007 and $410 billion in 2008, according to figures compiled by the U.S. Census Bureau. Despite the slowing economy, strong growth was seen in construction in the hotel/motel sector, higher education, health care and office facilities. On a seasonally-adjusted annual basis, as of February 2010, the number had dropped to $302.7 billion.

In the U.S., commercial public sector (for government), non-residential construction totaled $287 billion in 2007 and $307 billion in 2008. On a seasonally-adjusted annual basis, as of February 2010, the number had dropped to $292.7 billion.

Over the long term, there will be continuing demand from the health care sector for new or remodeled properties as the percentage of Americans over age 65 continues to grow, increasing demand for medical care.

The median sales price for an existing home in the U.S. during 2006 was $221,900, according to the NAR, slipping to $219,000 in 2007 and $198,100 in 2008. The Mortgage Bankers Association estimates that the price was $172,800 in 2009 and would drop to $170,100 in 2010.

The median sales price for new homes in 2006 was $246,500, according to the NAR. The organization’s figures showed that the number was nearly unchanged in 2007 at $247,200. The U.S. Bureau of the Census shows that number slipping to $230,600 in 2008. The Mortgage Bankers Association estimates the price at $214,200 during 2009, with $213,400 forecast for 2010.