One of Perriello’s most interesting tea-leaf reads involved the sale of pick-up trucks. “The sales of pick-up trucks in 2005 were about 900,000 units; in 2009, they reached a low of 250,000 units. Pick-up truck sales are now trending up again. People tend to buy new pick-up trucks when they get a new construction job, so increasing sales tell you that construction is starting to ‘pick up’.”
However, while Perriello is seeing this increase in new construction, he believes that the pace of new-home building is not fast enough to solve the current inventory shortage in many markets. “A lot of people would like to move up, but they can’t find something to move up to.”
More good news exists in the areas of distressed properties—foreclosure and REO properties are down by 1 million units—and underwater mortgages dropped to 15 percent from 22 percent in the last quarterly report from CoreLogic.
“This is exciting as this was a drain on the market,” Perriello explained. “People with mortgages with negative equity were driving a lot of delinquencies and foreclosures. If you’re underwater and making payments, you’re just renting; but once you have equity in your home, you’re more likely to make the payments. As soon as you get equity, you start behaving like an owner.”
