The Sky Is Falling!!

Thursday, October 25, 2007
October 16 Homebuilder Outlook Falls to Record Low

October 17 New Home Construction Plummets Again

October 24 Existing Home Sales Tumble 8 Percent

October 25 New Home Sales Rebound in September

Whoops. What's that doing in there? Don't those buyers understand that the end is nigh?

It will take at least three months of flat or very moderate growth before we'll be seeing any 'the worst is behind us' articles and there is a very good chance that September figures just reflect families wanting to get the kids into new schools. Nevertheless - I'll stick with my call that August marked the absolute bottom for housing nationally. Babies continue to be born at a markedly faster rate than oldsters are dying and that will be true until about 2021. Demand pressure should bring the market back to 2003 construction levels by spring of '09.

Barring a recession, of course.

Now, where's my umbrella?


Knucklehead said...

I'm having a difficult time conjuring up any sympathy for the folks struggling to make payment on their interest-only, sub-prime loans. They didn't have enough common sense to think through the deal they were signing.

There's no doubt that the housing market is struggling though. We've seen some builder bankruptcies that have left people holding the bag on unfinished homes or homes in unfinished subdivisions. I can conjure some sympathy for those people.

But where it seems to be reaching in and touching close to home is that people who are selling for all the reasons people normally sell (aged out and heading for warmer climate, moving for job reasons, etc) are deciding to wait out the bust and rent rather than sell. At the risk of sounding the bigot, renters slowly, but surely, drag down a neighborhood.

An ownership society is just flat out more deeply committed. Sorta like the old joke about the difference between investment and commitment that uses the illustration of the bacon and egg breakfast. The chicken is invested, the pig is committed.