This is good news for the resale home market. Home builders could conceivably get their inventory into line some year.
Given the huge over production in 2004 and 2005 and the low sales since, there is still a huge over supply of new home inventory. At least the graph is headed in the right direction.
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Philip 08.26.08 at 3:53 pm
John,
Low building permits…best news I’ve read yet. I think. Only the strongest builders will survive the next year.
The following is out of context from a paper I read summarizing the current real estate market.
“At the same time, the great number of investors waiting on the sidelines ensures that the market will not freefall to a depression.”
I think prices will continue to deteriorate ONLY to the point where a few investors begin picking up (relatively speaking) screaming deals in both housing and land. As supply increases and prices go down, demand will increase first by international investors then domestic investors and finally by the public. By this time, think Spring of ‘09, our Wall Street heroes will have figured out a new formula for loan underwriting again.