MarketWatch predicts zero new housing starts!

Posted by Tim
February 18, 2009

At this rate, starts would fall to zero by the end of the year.

via Housing starts plunge nearly 17% to record-low 466,000 rate – MarketWatch.

It is entertaining to see extrapolation taken to such a stupid level. Homebuilders do not want to sell houses at current price levels so they have stopped building. They have all written down their land inventories and the good ones are sitting on piles of cash until the housing and mortgage markets get straightened out.

Remember it will take homebuilders 18 months to 2 years to ramp up production to anywhere near the 1 million new homes per year the economy has absorbed for the last 30 years. It will be interesting to see the results when this (new home construction & prices) market starts to turn upward.

More on this topic (What's this?)
Questions about the coming wave of second mortgage writedowns (naked capitalism, 2/8/10)
CHART OF THE DAY: ARE HOME PRICES FALLING AGAIN? (THE PRAGMATIC CAPITALIST, 2/24/10)
Even the Dead Cats Aren't Bouncing (Financial Armageddon, 3/2/10)
Read more on Housing starts, Write down, U.S. Housing Market at Wikinvest
Real Estate

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