When you are friends with Alice and go through the looking glass you may be able to, like politicians, take a pill and be larger than you really are. Unfortunately for the single family new construction they do not have the same ability to delude themselves into thinking they are selling more than they are and their bankers prefer loans to be repaid with real money and not imaginary images of such.
Broken record is what is occurring in the housing market we are now approaching six years of down cycle from the peak in July of 2005 at 1,389,000 units sold, and a good solid two years bouncing along at what is a "bottom" with no indication of an movement upward. So what has the economy brought
#1 jobs --- housing is dead until the country creates jobs
#2 foreclosures--- no matter the rosy pronouncements by the national association of realtors, a market where just shy of 50% of the sales nationally are "distressed/foreclosures" is not "recovering" or anywhere close to normal
#3 Fannie mae/ Freddie mac--- while not blameless , if we decide to dismantle the financing conduits years will most probably turn to decades for "full" recovery of pricing to previous levels.
#4 home ownership rates are headed down and based on the severity of the downtown most probably will drop below what use to be considered "normal" 64 to 65% ownership 36 to 36% renters. The pendulum never stops and at the bottom and always swings past the middle, since the pendulum rose to approximately 70% all things being equal probably indicates a drop in home ownership rate to about 60%.
Sooooooo the thought to ponder ---- JOBS are housing--- what real actions are occurring to create them?
housing sales one unit structure new single family sales 284 peak year 1389 sales % drop from peak 80% five year average 593 sales % drop from five year average 52% 47 year average 678 sales % drop from 47 year average 58%
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