Chief economist for the National Association of Home Builders says U.S. home builders probably won’t rebound completely until 2010 or 2011.
That outlook is so pessimistic that it makes me suspicious. Usually trade groups are unrealistically optimistic.
Perhaps they’ve decided to lay the bad news on heavy now so that anything slightly less miserable will be seen as sunny.
On the other hand, home builders have been so slow to cut production that it actually could take them until 2010 or 2011 to get their act together.
{ 3 comments… read them below or add one }
Brian McMorris 07.26.07 at 10:22 pm
“Rebound completely” likely means get back to the peak levels of early 2006. If the decline continues, which it likely will according to many sources, it is not unreasonable that it could take an additional 3-4 years to get back to the levels of early 2006. It could be even longer.
Question: how long will it take the NASDAQ 100 to get back to 5100, its March 2000 peak? It has already been over 8 years and it is just half way there.
Cbass 07.27.07 at 7:08 am
Maybe they are still being unrealistically optimistic?
Paul Cooper 07.27.07 at 10:21 am
I agree with Cbass. A whole lot are still unrealistically optimistic, or what’s known as…in denial. And no bottom can be reached till those in denial capitulate. The fact is that fundamentals for housing suck. And it’s not just inventory. People just can not afford these prices with their current salaries. That is why they had to look for exotic mortgages. With those exotic mortgages now gone, a simple fact remains. In order people can afford to buy housing the way it was meant (with 30 year fixed mortgages and planning to live in it for 5-10 years), prices MUST come way down. The current huge inventory is not going to go away till that simple fact. Prices must come way down.