U.S. housing starts fall to 10-year low in July

[swag]

Source: MarketWatch

WASHINGTON (MarketWatch) - U.S. home builders cut back again in July, starting construction on the fewest number of new homes in more than 10 years, the Commerce Department reported Thursday. Housing starts fell 6.1% in July to a seasonally adjusted annual rate of 1.381 million, the lowest since January 1997. The decline was larger than the expected fall to 1.40 million. Authorized building permits dropped 2.8% in July to a seasonally adjusted annual rate of 1.373 million, the lowest since October 1996 and less than the 1.40 million pace expected by economists surveyed by MarketWatch. Housing starts are down 21% in the past year, while permits have fallen 23%

Read more: http://www.marketwatch.com/news/story/us-housing-starts-fall-10-year/story.aspx?guid=%7B499BA140%2D1960%2D41A7%2D84FA%2D8510BE169787%7D&siteid=bnb

[fasttense]

1. Now who could have foreseen this? n/t

[bleedingheart]

2. a realtor has been calling my husband and I every weekend

I told him looking at one of the model homes was okay...but he signed a guest book and now this woman keeps nagging us to buy this newer home...

It feels like desparation...

[wordpix]

3. just saw a cute small house on market for $369K; was on for $489K & on market 244 days

That is still a lot of money for a 1958 rancher but in this area of CT, it's a good price compared to what we've seen. STill needs to come down more for me to buy b/c these older homes usually need some fixup and that can run you $100K with the cost of labor here.

[dipsydoodle]

4. It's the knock on effect of the sub prime lending issues

Assuming the housing market to be driven from the bottom up then removal of the bottom for other than credit reasons has a knock on effect. This is now compounded by the credit issue and could take years to correct.

In almost any lending situation there will be bad debts which can be expressed as a percentage of total revenue stream. If sales are increased they mask the bad debt percentage because defaults in payment are not immediate. Take away the new sales and the model disintegrates - the bad debt percentage quickly escalates and the supply of money to lend becomes harder to get due to the now obvious higher risk.

[cliss]

5. The "real estate" game

is kinda like musical chairs. You've got your house + 2 flipper houses. You know the music is going to stop eventually, but you just don't know WHEN. But everyone damn well knows it's a bubble and there are no excuses for not knowing. Everyone knows.

When the music stops, you're stuck! This is exactly what happened to a friend of mine. He bought one house for $600,000. He bought another "fixer upper" for $500,000. His monthly mortgage payments are $5,000 + $3,000 = $8,000 / mo. not including property tax, sewer, water, fees, etcetera ad nauseum. He cannot find a single buyer for either one, and it's been 1 year.

I hate to tell you what's going to happen....

[closeupready]

6. I find it hard to sympathize with such people, even though

I know people like that. You can't save people from themselves.

[Sukie1941]

7. I'm Glad

Our valley here in Southern Oregon is becoming wall-to-wall housing everywhere you look.

Eco systems are deteriorating, our infrastructure can't handle the growth.

Where does it say that we have to continuously build homes and subdivisions in America??????

I SOLD my home and am happy living in my very movable RV on a world-class rafting river. Who needs more? Neighbors just brought in a brand new rig this morning--cost about $150,000! Mine cost $27,000 and it's paid for.

[cliss]

9. Hi, Sukie.

I was just down in Grant's Pass yesterday (I'm in Portland). I had to drive to Cave Junction to go visit some wineries. I was so surprised! It looked like 1/2 of Grant's Pass was "For Sale". I saw so many homes for sale, I was very surprised.

Then, I needed to stop in at the local library to check my emails. Surprise. The library was shut down "due to lack of funds" is what they told me at the local gas station. What???

And yet on the way out to Cave Junction, there was TONS of home building going on. I'm really confused.:smoke:

[David__77]

8. Too late to salvage the prices though.

There's so much housing sitting idle as it is. Prices will be droppings significantly. In my county of Sacramento, California, median prices are down 16.3% from the 2005 peak - even more if one takes inflation into account. Honestly though, here in this county, prices will have to come down another 30% from their current levels in order for equilibrium to be restored.