Housing Starts 'Sputter' in September
Here’s a graph we plucked off the blog Seeking Alpha (which in turn got it from Calculated Risk) in the wake of yesterday’s reporting of September housing start data. The numbers, which showed a small uptick from August and a large fall-off from a year ago, came in well below consensus expectations, causing the blog…
Here’s a graph we plucked off the blog Seeking Alpha (which in turn got it from Calculated Risk) in the wake of yesterday’s reporting of September housing start data. The numbers, which showed a small uptick from August and a large fall-off from a year ago, came in well below consensus expectations, causing the blog to comment that, “While there is ample evidence that the world economy is starting to pick up steam, one of the traditional engines for driving the U.S. economy out of recession is sputtering.”
a percent or two per year that is. sorry. still not 200-300% per year like Brooklyn.
“Tip of the iceberg.” AMEN
And all you people talking about what a great buy these million dollar plus piles of brick and wood are selling for are still part of the problem. Until prices fall here in NYC to what they actually cost to rebuild then give about half that price to the value of the lot, we will never get out of this mess. I say it again, slightly over a decade ago, houses all over Brooklyn could be bought for 100K. There is no reason for crap here in the Burg to be going for much more than that now. The houses haven’t changed, they haven’t been updated, they haven’t had a million dollars poured into them over the past 10 years, the neighborhoods haven’t really changed all that much – there is still crime everywhere you turn, so why the heck would anyone think they have increased in value. If anything they have rotted for 10 more years and should be worth the same or less. Throughout history housing has never increased more than a percent or two long-term, let alone 300-500% like they have here in the city over 10 years time. INSANITY. And you guys just eat it up.
Tip of the iceberg.
***Bill Thompson for Mayor***
You should really give credit for the chart to the Calculated Risk blog, it’s one of his charts – Seeking Alpha just reuse it.
The American economy has been too reliant on the housing sector for far too long. In the long run the perpetual housing bubble only works to the advantage of the finance sector by saddling consumers, whose wages are stagnant at best, with suffocating debt burdens.
If there is truly going to be a “reset” of the American economy, instead of a pause to the finance ponzi scheme, this decline is a good thing. If prices are declining with a massive overhang of properties in foreclosure that are being hoarded by banks until the market improves, then it would be insanity to have large increases in inventory at this time.
The true test will be when the Fed stops buying every piece of mortgage paper in sight and allows some semblance of an actual market in mortgage paper to find a clearing price. Allegedly this will happen in March 2010, but don’t hold your breath.
This is interesting in terms of countering the “boomlet” of optimism that was percolating at the end of the summer/beginning of fall.