Everyone knows, one of the big problems the housing market is facing is a glut of inventory. As a result, new construction has been and will continue to be constricted.
According to a story in this week’s Banker & Tradesman:
Economy.com is projecting that housing starts will be off 55 percent by 2009. Single-family housing starts will drop to 796,000 nationwide this year from a peak of 1.72 million in 2005, according to the National Association of Home Builders.
However, things aren’t necessarily as bad, here in good ol’ Massachusetts:
In Massachusetts, some builders are expecting a rebound in new-home sales starting this year.
Mark H. Leff, president of the Home Builders Association of Massachusetts, said permitting for new homes peaked in 1986 at more than 45,000 and then took five years to hit bottom at around 12,600. Permitting activity peaked again in 2005 in Massachusetts, when fewer than 25,000 permits were issued. Just over 13,440 permits were issued as of November of last year, according to the U.S. Census Bureau.
Whether or not we have a recovery in the real estate market, locally, is an open question, open to debate.
I have to say, though, the numbers above are quite interesting.
Again, in 1985, according to the local builders’ association, there were 45,000 permits to build. In 2005, at the height of the current cycle, only 25,000. And, as of November, 2007, only 13,440.
Did the builders adjust to current market conditions, in time? Here in Massachusetts, perhaps.
In FL and CA? I don’t think so.
Source: It Could Get Worse Before It Gets Better for Housing – By Aglaia Pikounis, Banker & Tradesman