Agreed, but there's zero arguement that building homes is much more economically stimulative than just "working off the existing inventory." There's a lower dollar multiplier associated with working off inventory (relative to building), and thus lower velocity. Although it's necessary at this point, it's just not the same effect.
Housing starts, permits hit record lows in April
- Thread starter ASusilovic
- Start date
Agreed, but there's zero arguement that building homes is much more economically stimulative than just "working off the existing inventory." There's a lower dollar multiplier associated with working off inventory (relative to building), and thus lower velocity. Although it's necessary at this point, it's just not the same effect.
The media is spinning everything as positive these days. There was a Barron's article over the weekend speculating that housing starts would be up 2% and how that was a sign of the bottom in housing.
Today the media is spinning the record drop in starts as positive for the reason you stated.
The media waits for the market's reaction before deciding what spin to put on the news. I saw the headlines change at least 3 times today.
I wouldn't disagree with a word you said, but I can offer some light based on real data. Now what the data means is certainly up for debate.
The basic background: I live in Florida which of course is a high foreclosure state. I get a report from a realtor friend every month that covers all listings/sales and pending sales in my area. I believe "my area" is defined by MLS and is not the whole state or even the whole city that I live in. The lastest report for April just came today.
SInce Jan 2008 the supply of homes for sales in my area has ranged between 13 and 16 months.
Something big happened in April though.
The number of homes listed fell by 50% and is now much lower than any other month since 1/2008.
The number of sales for Apr was greater than all of Dec, Jan, Feb and Mar combined.
The number of lending sales exploded as well.
The average price per sq/ft stayed the same for the 2nd month in a row. Mar was the first month since 1/2008 this didn't fall.
The supply dropped to 6 months.
The average selling price was 94% of list. Highest since 6/2008.
The average price, fwiw, was 254K.
By no means am I arguing that real estate is fixed. I thought these numbers were interesting though and was suprised at how quickly the supply fell in just 1 month. But, this is just one area.
It's 'anti-American' to post this kind of fact-based information.
None other than our own market guru - surf - said so.
Get on the Kudlow chain-gang, commie.
None other than our own market guru - surf - said so.
Get on the Kudlow chain-gang, commie.
Quote from ASusilovic:
WASHINGTON (MarketWatch) - Optimism that the housing slump had hit bottom was damaged Tuesday when the government reported that construction on new housing projects slowed to a record low pace in April.
New construction of single-family homes and apartments plunged 12.8% to a record-low annual rate of 458,000, much weaker that the 519,000 rate expected by economists surveyed by MarketWatch.
The drop was caused by construction of multifamily housing, which fell 46.1% to a record low 78,000. This was the biggest drop since January 1994.
Starts of single-family homes rose 2.8% to a seasonally adjusted annual rate of 368,000. Single-family starts have shown some stability in the past four months.
Building permits for single-family homes rose 3.6% to 373,000.
Starts are down 54.2% in the past year, while starts of single-family homes are down 45.6%.
http://www.marketwatch.com/story//housing-starts-hit-record-low-in-april
Optimism "damaged"...hum, I thought the comment would start with "green shoots subsided"...