Home-Building Slump May Be One For The Record Books

[marmar]

By ALEJANDRO LAZO, Los Angeles Times
1:40 p.m. EDT, September 5, 2011


Plagued by too many houses and too few buyers, 2011 is shaping up to be the worst year on record for new-home sales. The slump is pushing the key home-building industry into its fifth year of decline and keeping the U.S. economy from a rebound.

After past recessions, home building was a crucial driver of growth, creating new jobs firmly planted on American soil. But housing isn't helping out this time because builders' hyperactivity during the boom years and the loss of hundreds of thousands of people's homes to foreclosure have left a big supply of properties on the market.

Many economists don't see a significant rebound occurring until housing is fixed.

"If the recovery is going to come, it is going to be driven by two sectors: manufacturing and construction, and it doesn't look like there is going to be a big recovery in manufacturing," said economist Ed Leamer, director of the UCLA Anderson Forecast. "It is going to have to come in housing; otherwise we are going to limp along as we have been." .............(more)

The complete piece is at: http://www.courant.com/business/hc-struggling-builders-20110905,0,5261441.story

[ixion]

1. "It is going to have to come in housing"

Well, perhaps we should have thought of that before we turned housing into a casino.

Housing isn't going to recover any time in this decade, in my opinion.

[DURHAM D]

2. I have never understood the notion that housing drives the economy.

It seems bassackwards.

Shouldn't the economy drive the housing need?

[marmar]

3. In a sane economic system, yes.

nt

[Fumesucker]

18. A house is the single largest purchase most people will ever make..

Every mortgage note and rental payment in the country is part of the housing market, it's a huge chunk of the economy.

Housing might not overshadow finance these days in the economy but I'm not sure there's any other single sector bigger.

[DURHAM D]

20. The article is just about housing starts.

Thus my comment is related to new housing only.

[Fumesucker]

26. New housing injects a great deal of money into the economy..

Materials, design, landscaping, construction, lumber, stone, concrete, paint, electrical, HVAC, furnishings, appliances.

And unlike a lot of other industries housing construction is spread all over the country among tens of thousands of small businesses.

The velocity of money through housing starts is very high

[BR_Parkway]

28. Families form, grow, split up - and need housing options in spite of the

economy sometimes - most money spent on the labor is local money, as well as the builder profit so it stays in the community without being siphoned off to Wall St (there are a few mega builder exceptions) Then the people moving in buy things - household goods, paint, furniture, landscaping....

[xchrom]

4. Recommend

[durablend]

5. Plenty of empty houses out there already

But I guess we gots-ta keep building more!

:eyes:

[izquierdista]

14. Plenty of homeless out there already

But the foreclosures and evictions will continue until morale improves!

[Odin2005]

22. That's the insanity of Capitalism.

There are plenty of housing available for the homeless, but the homeless cannot move in to those empty homes because that is "trespassing" on "private property".

[treestar]

25. Why I don't understand economics that well

One would think the prices would go down and therefore they would be affordable to more people.

[dipsydoodle]

6. In the absense of non status mortgages

the boom probably wouldn't have occurred. All the market is really doing is putting in the historic correction. I don't see how your housing market is keeping the U.S. economy from a rebound.

[Warpy]

7. The only recovery in housing is going to have to come as renovation

rather than new construction. We have an oversupply of the wrong kind of housing. Instead of sensible family housing, we've got huge tracts of yuppie monstrosities with impractical floor plans, astronomical heating and cooling costs, and too few bedrooms to use for either large family groups or large groups of roommates. It was "investment housing," built to satisfy speculators who thought they could sit on it for 6 months and walk away with a huge profit.

We have an undersupply of sensible housing.

[DURHAM D]

10. So true.

Right now I am negotiating to purchase a 1950 Lustron home. It is less than 1000 sq. feet. Hope it works out - its my retirement home. Talk about sensible...

http://www.lustronconnection.org/home.html

"About 2,680 of these porcelain-steel homes were produced in America between 1949 and 1950 by the Lustron Corporation in Columbus, Ohio. An enormous facility housed the nine-mile Lustron assembly line. The ranch style homes usually had two or three bedrooms. Modern appliances including dishwasher were included."

[Warpy]

11. Interesting, I'd never heard of those

I love the illustration with that constipated early 60s furniture I grew to loathe and can't believe is now fashionable among hipsters.

My own place is just under 900 square feet, raised to about 1300 square feet by a very badly done attached garage conversion where my rug loom lives. It's actually more space than I need. I'd gotten used to being crammed into Beacon Hill apartments in Boston. A single wide trailer before I bought this place seemed palatial.

[DURHAM D]

13. Looks like there are only a hand full in MA.

http://www.lustronconnection.org/html/lus_phot/MAphoto.html

I think of it as a midwest thing. Did you notice even the roof is metal made to look like shingles? I never lived in one but my Dad loved them and at one time owned one as investment property.

[Warpy]

16. There's one out here in NM, up in Los Alamos

which is one of the few areas in this state where people had enough money to buy one. They were extremely pricey houses in their day.

[DURHAM D]

19. But they really do last forever. nt

[Selatius]

12. I would argue that has been a problem for 50+ years, when they invented sub-divisions.

Cookie-cutter housing with the sole purpose of simply packing people in. There's no town center, often is far away from centers of shopping or eating, and is heavily dependent upon the notion of personal vehicle ownership and cheap gasoline. You've got entire cities now built around the vehicle instead of people, so now you have awful sprawl in areas that basically aren't really pedestrian friendly. All of this is fine if gasoline is cheap, but those days went bye-bye a long time ago.

[Warpy]

17. Some of those earliest subdivisions are now inner city

while others have had small town retail centers and some office centers grow into them. I live in a house that was built in the middle of nowhere in 1946 that is now convenient to everything in the city, including the bus system. Most necessary amenities are within walking distance.

The far exurbs full of yuppie barns are the areas that are least likely to survive long term.

[Odin2005]

24. That's why I like living in downtown Fargo-Moorhead.

I can' drive because of my Asperger's, too much multitasking for my brain to handle, so I take the city bus everywhere. it's just a 5-15 minute (depends on traffic lights and trains) bus ride from here to the very center of town.

[Odin2005]

23. I couldn't handle a large home, I would forget to clean a lot of it.

I actually LIKE smaller homes because they are easier to clean and maintain. And I am less likely to accidentally leave a light on.

[Warpy]

27. That's what I told my dad and his financial advisor

when they both suggested I move out of this godawful barrio and into a big showplace in the fancier part of town. I said if I lived in one of those barns I'd have to clean it and no thanks. Now property values in those areas are crashing as people are foreclosed out of those places and empty houses start to attract vagrants, vandals and vermin.

[tularetom]

8. Can't buy a house if ya don't have a job

Put people back to work, let 'em feel like they have a future, they start looking at buying homes, the backlog slowly disappears and gradually home builders are back in bidness.

And pretty soon the builders need more employees, and the multiplier effect takes hold.

[madrchsod]

9. that is part of our shared sacrifice.....

[Shagbark Hickory]

15. It doesn't have to come from mfg or const. It could come from the green energy ecnomy we were teased

about in the 2008 campaign.

[Odin2005]

21. Housing prices need to keep crashing for a while before housing is affordable again.