Thursday, February 19, 2009

Housing starts fall to new record low

Housing starts have fallen to a new record low:
Initial construction of U.S. homes fell to the lowest level on record in January, according to a government report released Wednesday.

Starts fell to a seasonally adjusted annual rate of 466,000 in January, according to the Commerce Department. That's the lowest level since the government started keeping records in 1959.

The rate was down 16.8% from December's revised reading of 547,000, and 56.2% lower than January 2008. ...

January marked the fourth consecutive month in which housing starts fell to a new record low. Starts have fallen nearly 80% from their peak of 2.3 million in January 2006. ...

"Building activity is all dried up," said Larson. "Some of it is voluntary cutbacks, because the inventory is excessive. But there are also involuntary cutbacks, as lenders are cutting off funding for developers."
Having the lowest number of housing starts on record is worse than it sounds, because in 1959 the U.S. only had a population of 177.8 million compared to 303.8 million today.

17 comments:

  1. Well, that's because sprawl is dead.

    Duh.

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  2. Yeah, it has nothing at all to do with the whole "housing crash" thing.

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  3. Oh yeah, sprawl and housing starts are not interrelated. Brilliant.

    Duh.

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  4. "Oh yeah, sprawl and housing starts are not interrelated. Brilliant."

    I would have to say it has more to do with banks loaning money to morns with no money or jobs than it does with sprawl. You will soon lose your house and it will be on the market as soon as your ARM resets too. Dont worry though, I will buy it when it drops back to the normal 2001 price before banks loaned people like you money that you cant afford to pay back.

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  5. demand is 500k/month

    excess inventory is ~1,000,000

    29 months to eliminate inventory overhang at 466k/month

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  6. "Oh yeah, sprawl and housing starts are not interrelated. Brilliant."

    Ah yes, the classic strawman.

    Did I say "sprawl and housing starts aren't interrerlated?"

    No...

    What I pointed out is that the primary reason for the massive drop in homebuilding is the housing crash.

    Just 2-3 years ago we were setting new home construction records, now we are hitting record lows?

    What changed in that time?

    The bubble burst.

    Sprawl did not suddenly "die," nationwide. Sorry to upset your urban living fantasy.

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  7. "before banks loaned people like you money that you cant afford to pay back."

    Talk about your strawmen. Such hipocrisy.

    Right, and two years ago you were arguing that housing prices were unsustainable because of the abundance of farm land and lumber that could be converted into housing units.

    Now you're arguing that the consumption of farmland and lumber has stopped abruptly because I'm putting forth the notion that sprawling construction has stopped abruptly. That doesn't make much sense.

    Also, your assumptions that I'm anti-sprawl because I live in a city are erroneous.

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  8. "What changed in that time?

    The bubble burst."

    Either that, or the sprawl-based (oops, I mean "growth based") economy collapsed. Hey, maybe they're one in the same? Duh.

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  9. "Talk about your strawmen. Such hipocrisy.

    Right, and two years ago you were arguing that housing prices were unsustainable because of the abundance of farm land and lumber that could be converted into housing units."

    I just found this blog a month ago. I didnt argue ANYTHING 2 years ago. If I did argue that prices are unsustainable, it would be because they quadrupaled in price over a 4 year span.

    "Now you're arguing that the consumption of farmland and lumber has stopped abruptly because I'm putting forth the notion that sprawling construction has stopped abruptly. That doesn't make much sense."

    I didnt argue why consumption of farmland stopped abruptly. You did. I said prices have dropped cause of morons like you getting loans you cant afford.

    "Talk about your strawmen. Such hipocrisy."

    You are telling me what my argument is in your post. Do you even know what a strawman argument is?

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  10. "Either that, or the sprawl-based (oops, I mean "growth based") economy collapsed. Hey, maybe they're one in the same? Duh."

    Or it could be the banks dont give people with no job or downpayment $600K loans anymore.

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  11. "Or it could be the banks dont give people with no job or downpayment $600K loans anymore."

    You're missing your own point.

    You argue that houses aren't worth $600K because we can always plow under cow pastures and farm land, and slap up an unlimited number of new housing units. (This is the antithesis of the "they aren't making any more land" argument).

    Then, when the process of plowing under cow pastures and farmland to slap up new houses and stripmalls (aka sprawl) comes to a grinding halt, you argue that it stopped because "no one can afford $600K homes any more".

    Cognitive Dissonance. You live it. You might as well look into it.

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  12. "You argue that houses aren't worth $600K because we can always plow under cow pastures and farm land"

    No, Im saying houses arent worth $600K, cause people like you will lose your home when your exotic loan resets. Man you are dense.

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  13. "cause people like you will lose your home when your exotic loan resets"

    Wow. If it helps you to beleive that I have an "exotic loan" that is going to "reset" and cause me to "lose my home", please proceed. It is the equivalent of a small child needing his special blanket or "blankie" to keep him from being frightened.

    "Im saying houses arent worth $600K,"

    What houses? The ones that aren't being built any longer because sprawl is dead?

    (This is your cue to argue that sprawl is not dead while agreeing that housing starts have come to a halt, and thus you overlook the correlation between sprawl and housing starts, and we start back at the beginning...)

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  14. "What houses? The ones that aren't being built any longer because sprawl is dead?"

    Houses in the beltway. (or just right outside such as bethesda, rockville, potomac) They just arent worth $600K-$1.5M.

    And all the foreclosures and shortsales in the past 3 months prove that. You are an idiot.

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  15. by the way, housing starts in dupont circle have stopped too, not just in fredrick or manassass.

    duh!

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  16. "by the way, housing starts in dupont circle have stopped too, not just in fredrick or manassass."

    Heh - tell that to all the crane operators who still seem to dominate the DC skyline.

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