Monday, August 01, 2005

Home Construction Boom & Oversupply

There is a "is a construction boom that is starting to outpace demand. America creates only about 1.2 million additional families or individuals who need new housing each year. About 400,000 houses have to be replaced because of obsolescence each year. Add in, say, 300,000 more for second or vacation homes, and the total annual demand for additional housing tops out at about 1.9 million. But builders and manufacturers are on track to create at least 2.2 million new housing units this year" ( US News & World Report, 6/6/05 ) .

Home Construction Underway

The supply of housing has been outpacing the demand for housing. So who has been buying the rest? Speculators and flippers. But demand is not keeping up with supply. Perhaps, that is why for the second month in a row there has been a decline in the median price for new homes.

1 comment:

  1. The inventory is building. And most likely will keep growing- all of a sudden it will look like That cartoon coyote running, and then the land ends- and he is off the cliff. OH Shit!