Housing Market Stumbles As Construction Approaches 'World War II Lows'

wsj.com:

In major markets across the country, home sales are deteriorating, inventories of unsold homes are piling up and builders are scaling back construction plans. The expiration of a federal home-buyers tax credit at the end of April is weighing on the market.

On Tuesday, the U.S. Census Bureau said single-family housing starts in June fell by 0.7%, to a seasonally adjusted annual rate of 454,000. The U.S. started 1.47 million homes in 2006, before the housing bubble popped.

Read the whole story: wsj.com

Comments

[Caliwoman]

11:11 PM on 07/22/2010

Um, dont we have enough empty houses and isnt it rational to stop for a few years?

[1Woman4Obama]

02:41 PM on 07/22/2010

Any thoughts on whether construction costs are down? Sounds like a silly question but I've heard labor is down (obviously) but material costs are up -- so the square footage cost is not down.

This may vary greatly by area but I'm curious on thoughts/ experiences .....

[outnow]

09:16 AM on 07/22/2010

Real wages have not grown in decades. So where's the demand for housing with jobs coming from?

The population of the world has tripled since 1970. The environment cannot support the population without cheap oil, and even that will cause more pollution. Humanity is out on a limb and sawing as quickly as possible. We need unlimited oil but the oil is killing us.

We are looking at not five years but 25 years - until all the fraud is wrung out of the fake paper. But by then, the population will be at 10 billion and the resources will not go around. The earth cannot support the population.

We have a much larger elephant in the living room than a fall in housing prices, even a permanent one.

My sister and I marketed a house three years ago, She is a Washington insider.The house was in a Los Angeles suburban area. We finally closed at a price that was 60% of an appraisal in January of 2007. I saw the handwriting on the wall, she didn't.

[born 2b different]

11:26 AM on 07/22/2010

you've made some good points that I agree with.

[1Woman4Obama]

02:44 PM on 07/22/2010

The market hadn't crashed in the LA in Jan. 2007 -- it didn't even begin to dip down until that summer. Could you really only get 60% of an appraisal? Was this the Inland Empire?

[outnow]

03:12 PM on 07/22/2010

My sister delayed putting the house on the market and then refused reasonable offers going down. So there was a delay of eighteen months in going to market and another two years of refusing to recognize the downward spiral. The house remained unoccupied and was not rented. Such is the arrogance of such people who believe in Wall Street whiz kids. The area is a good part of Whittier, once a desirable address.

Real estate did not go down in all zip codes. In Carmel Valley in San Diego we survived.

We have no mortgages and are not trying to sell our home in San Diego so we are very, very lucky. Bought in 2004. San Bernardino and Temecula and many other So Cal cities were hit really hard.

My sister's homes in Chevy Chase and Newport did OK.

New homes - 5 bedroom - were being sold by Wells Fargo for $150,000 two years ago - the price was $450,000 before the crash.

Location, location, and jobs...(the new factor).

[Hardyman1966]

06:50 PM on 07/21/2010

I don't understand the point of articles like this.

This didn't happen overnight, it won't get fixed overnight. Everyone looking for the next gold rush in real estate construction and sales or loan origination and mortgage sales is going to be disappointed for quite some time.

Lending has gone back in time at least 30 years where you show all your cards and put a decent amount of money down. As long as things are STILL overpriced and no one is taking a risk on credit right now, you're going to have to wait on that S550 just a little while longer.

[ImmanuelGoldstein]

07:23 AM on 07/22/2010

I couldn't agree more. There are a slew of people out there who think that 'recovery' means there is some secret jedi mind trick or judo hold that Bernanke or Obama could be using and 'poof', back to the days of selling each other million dollar houses. And the only reason that isn't happening is because they are dumb or being mean. These folks really need to get a clue. It's going to take YEARS AND YEARS to dig out from under this mess. And dumping on Obama because he doesn't push some secret button and make it all go away is STUPID.

[1Woman4Obama]

02:53 PM on 07/22/2010

You would think we would have learned from the recession we were heading into at the turn of the century. The Bush administration did "push a magic button" and "make it all go away" by propping up the economy with a spend, spend, spend mantra fueled by subprime lending and low interest rates that encouraged home equity lines. The problem is, it really came back to bite us. If we would have taken a softer dip after the end of the dot.com bubble, we wouldn't be where we are now.


If we want a healthy economy, it is going to take time to heal. The financial industry must be reformed and individuals have to change their spending habits.

[TheRLeePost]

05:44 PM on 07/21/2010

"The housing market, whose collapse pulled the economy into recession in late 2007 . . . "

Wow, this article leads with a statement we haven't seen in any news report or commentary since September of 2008. Unfortunately, it then finishes with a telling comment, "is stalling again."

First, it isn't really stalling again, it has never recovered, far, far from it. And we haven't heard much about it, because since September of 2008 all we have read anywhere is that the economy died after the banking crisis. That poor reporting, has kept us for two years from understanding what it is that ails the economy.

You can throw medicine (money) at a patient all you want, but if you don't analyze the malady and give the patient medicine that will correct the ailment, it's all a waste of medicine (money) that we can't afford.

-RLee
http://therleepost.blogspot.com

[ThePeacemakers]

05:25 PM on 07/21/2010

Delay your gratification folks and housing will be affordable again. 5 years. Let the banks SIT on them.

[John Warriner]

08:44 AM on 07/24/2010

Houses in NJ are still overpriced and unaffordable to most prospective buyers. Buyers would rather rent and sit in the sideline. Let the owners pay for the ever increasing municipal taxes, utility expenses, insurance, and maintenance costs.

[ImmanuelGoldstein]

03:17 PM on 07/21/2010

Wow, with 19 million vancant houses in this country, they don't want to build more?
Hooda thunkit?
Housing prices are still above post WW2 norms and have nowhere to go but down.

[TheRLeePost]

05:56 PM on 07/21/2010

But that's a problem for all of us. Because we have 4 million people in the residential construction industry who are without income, therefore we can deduct all of their purchase power from our economy.

What do you think sent the economy in the tank? The banking crisis? Not. It was the ruination of a major sector of our economy, 5% of our GDP was involved in residential construction, it is virtually the ONLY manufacturing that exist in our country.

You may sit there and write smug comments about the housing market. But, in fact those who worked in that industry have been far greater victims than those in the Gulf who have reaped the benefit of public sympathy. If an entity systematically poisoned the market where you make your livelihood, you'd feel something.

Your 'leaders' in Washington have failed to correct our economic ills because they lack an understanding and perspective, and , sadly, the economists who allowed this to occur are worse at knowing how to correct it than they were at foreseeing it.

[ImmanuelGoldstein]

01:57 AM on 07/22/2010

"Because we have 4 million people in the residential construction industry who are without income, therefore we can deduct all of their purchase power from our economy."
Your spending was fairy dust. Conjured into existence by the wizards of credit. Your spending was just a part of the pseudo wealth that has been created in the last thirty years.

"What do you think sent the economy in the tank?"
Well let's see, the collapse of a generational credit bubble that was papering over an equally generational divergence between wages and productivity. It's pretty self centered of you to think the world came to and end because we can't build more McMansions.

"You may sit there and write smug comments about the housing market. But, in fact those who worked in that industry have been far greater victims than those in the Gulf who have reaped the benefit of public sympathy. If an entity systematically poisoned the market where you make your livelihood, you'd feel something. "

Hey,what do you want from me? Kiss your boo-boo and make it better? Repeal the principles of economics, arithmetic , even PHYSICS, that make it impossible for us to build exponentially more expensive houses at exponentially increasing rates forever?

The builders were as much victims in this as were the Manson family.
You were right in the mud pits wallowing with the crooked bond raters, the NINJA loan hawkers, and other swindlers.You should have saved some of that money.

[DFL]

01:11 PM on 07/21/2010

Hoover gave us republican depression #1 and Bush gave us republican depression #2

[Beau2]

03:22 PM on 07/21/2010

It was a recession when Bush left. It took Obambi to grow this into what feels like a full blown depression.

[Beau2]

12:52 PM on 07/21/2010

More of that hope and change that we were promised.

[Cowboylove]

02:44 PM on 07/21/2010

Th firemen didn't start the fire...

[Beau2]

03:21 PM on 07/21/2010

And, after a year and one-half, they are not putting it out......EITHER!

It is time for them to get out of the way and get some adults involved. They clearly are in over their heads.

[slogward]

11:54 AM on 07/21/2010

I bet like me you figured this sort of thing could be fixed by the IMF or whatever.
Think again...
http://nbyslog.blogspot.com/2010/07/imf-how-much-help-will-it-really-be.html

[angry expat]

11:39 AM on 07/21/2010

Unfettered development is what destroyed the heart and soul of the DC metro area. They built ugly, cheap and anonymous-looking houses and crammed them as close together as possible. There are no more farms, and green spaces have shrunk drastically. Look at classic communities like old Frederick, Takoma Park and Hyattsville - they are more beautiful and inviting that these depressing, lonely subdivisions that have cropped up everywhere.

And please tell me how we can have empty houses and a large homeless population?

[lightningbolt]

11:49 AM on 07/21/2010

Homes and real estate in the DC area are extremely expensive. That is why we have empty houses and homeless people. Housing prices have been artificially propped up by the bank bailouts. If we had a free market, the empty houses would go down in price and people would be able to buy them, but they remain expensive and uninhabited.

[curiousasheck]

11:37 AM on 07/21/2010

Clip coupons and live off of interest and dividends, like my Republican friends do.