In spite of the slowdown in housing builders keep continuing to build. around my area there are a bunch of new houseing projects just starting to break ground. there are a bunch of commercial buildings that have gone up in the last year that have many vacancies and yet there are new commercial buildings being built. a while back the homebuilders were talking about the market getting back to normal once a lot of the inventory is worked through but I dont see how thats possible with all the new inventory coming online. I dont think we are any where near a bottom in the real estate market. My brother in law works for a roofing company and he just got laid off along with about 200 other people at the company and all the equpment was just reposesed. my cousin is the manager of the commercial loan deptartment at a bank and he just told me that they just lost 11 million on this condo project they did a loan on. they built the first phase and could only sell 3 units so they just filed bankruptcy. I think we are just seeing the very beginning of bad things to come. it will only get worse as credit markets begin to get tighter. I'm not trying to be negative. I hope I am wrong because I am in the middle of my own real estate project.
builders still building
- Thread starter mark77418
- Start date
Builders always do that. I saw projects start in other housing downturns and one, I was there by pure happenstance, burned up while the owner stood there with a sheepish grin, not kidding for a minute here. The banks, the builders.... not the smartest money by a long shot. The Realtors aren't, for the most part, either. In fact, in the whole process, who is the smart money??
How do you stop a moving train?
A lot of builder has contracts with subcontractors; you can build it and hope the price will stabilize then sold to the next suckers. or just paying subcontractors without building anything.
At this stages; it is for the best of builder to rush getting off all theses contracts in the pipeline and delay the new contracts as far apart as possible.
A lot of builder has contracts with subcontractors; you can build it and hope the price will stabilize then sold to the next suckers. or just paying subcontractors without building anything.
At this stages; it is for the best of builder to rush getting off all theses contracts in the pipeline and delay the new contracts as far apart as possible.
I live in a subdivision that has roughly 3000 homes in it. I'm amazed at how many of the existing homes have gone on the market in the last six months. Almost none have sold. There is an intersection not far from my house where all four homes on that corner are for sale. One of which has been on the market for the better part of two years. Through two or three different agents and now for sale or rent by owner. And yet the developers are still building new homes. I agree with someone else's comment. Of all the construction people I've personally met over the years, save one brick mason, collectively they didn't posses the intelligence of an ashtray.
Smart money (those 'ahead' on the trade) -has been- real estate agents, mortgage agents, developers in the housing boom, and lenders that -completely- resold the mortgages they originated on the public markets. Additionally, smart money are those who locked into those alt-A and other riskier mortgage products at record low risk spreads at fixed rates, and companies that floated their junk debt (sold bonds) at the same record low risk spreads before this credit crunch blowup.
Dumb money = anyone who bought this debt at record low risk spreads (ie hedge funds), developers who are still building, and people who bought their houses at overpriced levels WITHOUT offsetting price risk against being long that low cost risk spread (ie fixed rate at low premiums). In other words your ARM buyer who bought the top.
I can't call construction workers dumb money. They are honest guys working their ass off trying to make a living, and aren't exactly investing capital to do it.
Real estate agents put nothing down -- same thing. they aren't dumb money, they are just dumb.
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