The impact of the terrorists attacks of Sept. 11 on the nation's housing market won't be terribly severe, say economists speaking for the three major residential real estate disciplines -- home building, general brokerage and mortgage finance -- predicted last week.

David Seiders of the National Association of Home Builders has scaled back his forecast through the second quarter of 2002. But he expects the biggest hit in the fourth quarter of this year, when housing starts will total just 1.45 million on an annual basis or about 10 percent below the NAHB's pre-911 forecast.

David Lereah of the National Association of Realtors also predicted a rather short-lived downtown. Noting that sales and listing activity is already back to 95 percent of normal after grinding to a virtual halt for the first few days after the attacks, he anticipates that housing "will pick itself up and go right back to where it was three or four months ago."

David Berson of Fannie Mae predicted a "fairly quick recovery" as well. Overall, he said housing sales should be off only about 5-6 percent at worst "from peak to trough." And that, he offered "is a very small decline."

The three economists made their predictions at a press conference at the recently remodeled and expanded NAHB headquarters building, the National Housing Center, in Washington. It was the first official event at the refurbished structure, and it was called to provide an up-to-the-minute report on the state of the housing market.

All three hedged their bets somewhat. Seiders, for example, said he's never seen such a degree of uncertainty about where the overall economy in general and housing in particular are heading in the short-term. And warning against leaning too heavily on history as a guide, Lereah said "we're in unchartered waters."

For September, NAR said existing single-family home sales fell nearly 12 percent to a seasonally-adjusted annual rate of 4.89 million units, 5.2 percent below the 5.16-million unit pace in September 2000.

But noting the critical importance of housing to the economy -- something on the order of 20 percent of the gross domestic product can be attributed either directly or indirectly to housing -- the economists nevertheless expect housing to once again lead the nation into recovery.

"We have seen tough times before and we have always rebounded and led the economy to a higher ground," said Bruce Smith, the Northern California custom builder who heads the NAHB and has been through three major recessions during his career.

Unlike previous downturns, Smith, who moderated the 90-minute briefing, also pointed out, this one is taking place at a time when most of the major indicators favor real estate. While past recessions have been marked by high interest rates, overbuilding and weak monetary policies, he said, mortgage rates are their lowest in three decades, inventories are low and the Federal Reserve Board is acting aggressively.

"We've never seen anything like this," the California builder said. "It's a dynamic that's never existed, and it bodes well for housing."

Even the houses that won't be built or sold as a result of the terrorist attacks and the ensuing anthrax scare won't be lost, Seiders, the NAHB economist, ventured. They'll just be postponed, he said, explaining that "for housing, transactions that lost in the short term because of economic problems or shocks to the system generally are regained down the line."

Indeed, in recognition of what he called "the durable demographic foundations of the housing sector," Seiders as upped the ante for housing starts in 2003, raising his original forecast by 50,000 to a "hefty" 1.684 units. If he's right, half the 100,000 houses that won't be built because of the attacks will be in the ground within 27 months.

New home sales, says NAHB, dropped to a seasonally-adjusted annual rate of 864,000 units in September, a 1.4 percent decline from the August rate of 876,000 units.

Predicting the "smallest downturn of any recession in the post war period," Berson of Fannie Mae said the effect of the recession on housing will be negative "but not very negative." And for the decade as a whole, he offered, the next 10 years are "likely to be the strongest ever."

For more articles by Lew Sichelman, please press here.

Published: October 29, 2001

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.