The components of residential investment in the fourth quarter GDP report (which is subject to revision, of course) is worth looking at more closely.

Single-family housing, which made up more than 3.5% of GDP at the peak, has declined precipitously, but registered a slight increase in the fourth quarter. Another driver of growth in residential investment was brokers’ commissions, which were sparked by the rapid rate of home sales. These drivers were offset by continued declines as a percentage of GDP in multi-family investment and residential improvements.

What should you read into the numbers? The recovery is in the timing; the new home and resale home market began its decline earlier than other segments of the residential investment economy. Improvements are driven partly by home values and partly by income; multi-family investment is driven by access to credit markets and property valuations.

Sustained improvement in the residential real estate market will help to drive increased investment in home improvements. The dynamic for the multi-family is somewhat more complex, but hinges to a large degree on stability in the employment markets.

Thanks to CalculatedRisk for the chart.

As the year winds down, I was curious which posts over the course of the year were the most popular. I was pleased to see that the posts that had resonated the most with all of you were ones that I felt like I’d achieved some clarity around an idea that I’d been working through. (It’s also interesting that these posts are among the most frequently accessed through search.)

The number one post was from March: Social Media Can be A Marketing Platform. This was when we were taking Network Communications into its Project Massive Network, an effort to get every person in the company using social media to broaden and intensify their professional connections.

Through the year, I kept meaning to come back to the concept of Evangelist. The word too easily connotes intense passion, while I believe that the most effective Evangelists are the ones who have completely integrated their nature with their passions, so that they communicate a relaxed enthusiasm that inspires and attracts others. Evangelism is too often associated with a mania and mono-focus that can be off-putting.

The number two most-popular post was a very detailed case study that I did in June about migrating our marketing strategy at Apartment Finder to a social media focus. My intent with this post was to demonstrate each of the steps that we had taken to extend our communications with the multi-family marketplace to multiple platforms, and our efforts to modify and adapt our messaging to the unique attributes to the platforms. This effort continues today and deserves a follow-up: the most challenging aspect of the initiative is maintaining continuity and assessing its effectiveness. Despite our intent focus, we have areas of spotty execution with our own program.

The third most-popular post was my first attempt to consolidate the thinking that I’d been doing about how a traditional publishing content workflow needed to adapt to accommodate the inclusion of social media platforms. In Thoughts on Evolving the Content Strategy in Publishing to Leverage Social Media I outlined the Sharing Model of content creation. This model outlined here as served as a framework for developing new processes at our regional home design brands, and in some instances we’ve seen significant impact on audience and enthusiasm. The process is a living work in progress.

The fourth most frequently viewed post is an down-and-dirty analysis of State Farm’s presence on Facebook. This was a period when I was trying to understand the challenges that face traditional marketing departments when implementing social media programs. The post was published in April and is one of the two most-frequently accessed posts through Google search. I recently re-visited the State Farm Facebook sites and little had changed.

In the Spring, I was doing a lot of work to try to quantify the impact of the economic decline on consumer spending, marketing outlays and media allocations. In an early April post, I pointed out the contradiction between industry research showing the effectiveness of TV and magazine advertising and the steep declines in revenue. The point: When marketing budgets shrink, the most expensive media goes first.

I’m kind of proud that a self-serving post doesn’t show up until the number 6 spot. Over a period of 6 months, we radically shifted our traffic strategy at ApartmentFinder.com in order to leverage what we percieved as our core strengths. This shift was rewarded in April when Comscore reported ApartmentFinder was solidly in the top 5 destinations for apartment shoppers on the Internet. Our work put us solidly in the consideration set for online-only marketing in the multi-family industry, and we did it despite being heavily outspent on search engine marketing traffic by our competitors.

The seventh most-popular post, from July, demonstrates how powerful social media can be. I described a disappointing customer service experience with American Express. A couple of days later, I heard from the Chairman’s Office. It doesn’t match Jarvis’ Dell experience, but it was an instructive moment in the new age of marketing and media.

A May post reporting on research that shows how effective print advertising is in driving web traffic came in at number 8. Despite multiple instances of independent research like this, many people insist of maintaing a very simplistic “Print Is Dead” position. At this point, I just shake my head and wonder why the concept of using multiple platforms to intersect with consumers to drive business activity is so hard to accept. [I very accepting of marketers who say they don't have the money to invest in premium marketing choices, whether they are online or offline. Then we can have a conversation about how to leverage their marketing resources to build their business. Just sitting around arguing about living or dead media gets old very fast.]

An October post made the top 10 and is a big search favorite: The Current State of the Economy in 5 Pictures. I realized doing this analysis that I should update the post in January to reflect the fourth quarter results. Lesson: People like pictures.

The number 10 position is taken by a post where I ranged outside of my limited sphere of knowledge to speculate about how social media platforms would change the way that people searched for information. The premise was that “human search” would develop through the filtering of content by overlapping social graphs. This is happening on Twitter and is expressed by many as crowd-sourcing. I had fun thinking about the problem and putting together the schematics. The post attracted a broad readership and started many conversations. I’m sure that those followers soon dropped off as I returned to my more mundane noodling about business models, business processing and marketing approaches.

CNBC reported on new trends in what consumers are looking for in new homes. [Watch the clip to the third segment.]

The American Institute of Architects Design Trends study shows a distinct shift in the way that consumers are thinking about the functionality of their home, with the focus on creating more use and more efficiency out of the space.

See highlights from the report here.

The remodeling market has experienced an epic correction over the past two years that will significantly change the fabric of the business, a Harvard study shows. The good news is that macro-economic factors, along with the impetus of government stimulus, points to a recovery in remodeling spending in the second half of 2009.

Since the peak of $147.4 billion in the second quarter of 2007, spending on remodeling has dropped to approximately $122.65 billion in the second quarter of 2009. The $25 billion decline has been driven by the magnitude of the housing correction: the drop in home sales and prices has reduced homeowner wealth by 35% and shifted the value of their equity from close to 60% of home values to less than 45% of home values. Reduced turnover and reduced value, coupled with the pressure on household incomes created by increased joblessness, has curtailed the number of high-end and discretionary remodeling projects.

During the housing boom, remodeling was driven by the growth of high-end discretionary projects.  As the accompanying chart shows, those types of projects accounted for 30% of remodeling spend in 2007, compared to 20% in 1995.  The drop in home values creates a strong disincentive for investing in high-end discretionary projects which are unlikely to significantly improve the value of the home.

Harvard’s near-term forecast identifies a bright spot, however. The impact of the government stimulus plans, coupled with a modest recovery in the economy, will begin to drive increased activity in remodeling late in 2009 and into early 2010. In fact, Harvard estimates that the impact of the Federal Foreclosure Relief Plan will amount to $2.6 billion in additional home improvement spending.

There will be some basic difference in the geography and the focus of remodeling projects in the recovery, according to Harvard’s 2009 study, The Remodeling Industry in Transition.

With the length of time people will spend in houses increasing, the types of remodeling projects that receive investment will change. Long-term owners spend relatively more on exterior replacements and disaster repairs, while new owners invest their remodeling dollars in new room additions and property improvements. (Spending on kitchen & bath projects is relatively even between the two groups of home owners.)

In addition, key areas of focus for remodeling are likely to shift to systems and equipment, as homeowners look to take aging housing stock and make it more energy efficient.

A key driver of the geography of remodeling will be driven by housing values. Research shows that homeowners spend more money on home improvements when property values are increasing. This suggests that markets that have experienced precipitous drops in home values, such as Phoenix and Las Vegas, along with sharp declines in the turnover in homes will not experience significant rebounds in home improvement investment. Markets that begin to experience increases in home appreciation will see more significant shifts in remodeling investment.

A final note about growth markets: Immigration is an incremental driver of household formation and remodeling investment. Those markets with a healthy influx of immigration, along with a economic infrastructure that can support more labor, have better mid-term prospects for growth in remodeling than do markets lacking these characteristics.

You can find the report at this link.