In November, new home builders cut their production levels to the worst seen in 50 years. Clearly, there are very few new houses being built…
…and that’s good news.
The primary problem in the real estate market is an excessive supply of properties. As soon as the supply of available property reaches a healthy level, the real estate market will be fine again.
Therein lies the rub - there are currently 3 primary sources of housing inventory: (1) New homes; (2) Resale homes and (3) Foreclosures.
Traditionally, foreclosures are a far less significant portion of the supply of available housing, but with the glut of foreclosures we’ve experienced in recent months, it’s become a difficult road for both home builders and people who want to sell their homes.
That’s why construction companies are cutting back their production to a huge degree. And while this is inflicting serious pain on the employees of those companies, it is, unfortunately, something that has to happen. Until the supply of foreclosures is depleted sufficiently that demand for housing begins to level off and grow again, it will be construction companies that take the hit.
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2 Comments So Far»
The news is MUCH worse than that!
U.S. Economy: Housing Prices Collapse at Near-Depression Pace
http://tinyurl.com/8alcyc
Come on, Caitlyn. The article you cite admits that data doesn’t even exist for home sales prior to 1968. It takes a level of pessimism far beyond the bounds of reason and evidence to think that ANYTHING about our economic situation today is even vaguely similar to the Depression era.
At least, that’s what each of the people I’ve asked who lived through the Depression has told me - and I’ve been aggressively seeking them out, though admittedly only found a few. So I’m going with the eyewitness accounts rather than the headlines written by intellectually vacant tabloid/news (same thing?) writers whose focus is getting attention to the exclusion of accurate reporting of the news.
There’s a tough market out there, no doubt. But for these idiot journalists to say it’s like the depression is the height of either ignorance or deceipt. Probably a little of both. — Bryan Ellis
I would like to have it done at 8 pm EST.
Thanks
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