Real Estate

Housing Starts Fall To Lowest Level in Eight Months

Tue Jul 20, 2010 9:33 am
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It was reported today that housing starts have fallen to their  lowest level in eight months. This should come as no surprise to the so-called experts. People need a job to buy a home. More important is the fact that people need a secure job to buy a home. Banks have made it more difficult to buy a home. Documentation, cash and excellent credit are the keys to buying a home.

Builders get it, they do not want to exhaust their lines of credit building/starting new construction in the summer with little expectation that the new construction will sell any time soon.

Typically Spring is the time buyers buy! This has not been the case the past two plus years. Buyers are few and far between. Inventory of existing homes far exceeds the number of qualified buyers. The key is the term "qualified buyer".

Even when banks give mortgage approval letters to buyers they are not necessarily valid. Circumstances change up to the moment of closing.

Until confidence is restored in the marketplace and people feel that they have some cash on hand and the matter of credit is resolved with mortgage money being more readily available the housing market will remain sluggish.

I do not expect real estate to recover for at least two to five years. Too many homes on the market, more foreclosures in the mix and too few qualified buyers. The key is "qualified" buyers. This is what created the problem to begin with, too many buyers having become homeowners that should never have been homeowners.

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