Housing Perspective: November Housing Starts
By AUSTIN NELSON
Housing starts in the U.S. fell to their lowest levels since the government started keeping statistics on the subject in 1959. The drop is staggering — almost 20% since October — and is another stark indication of the current state of the U.S. housing industry, not to mention the economy as whole.
As noted ad nauseum on this site, supply far outstrips demand in most of the country’s real estate markets. Homebuilders are being kept busy simply trying to sell the homes they’ve already built, tens of thousands of which sit empty where they stand, surrounded by bank owned properties and uncompleted projects. There is simply not enough demand to support continued building.
Housing starts will likely continue their decline as large nationwide homebuilders contract their operations and some even close their doors. The homebuilding industry will struggle to improve until unemployment eases, lending standards loosen up and the flood of foreclosed properties recedes. It will be years until we see these events unfold.
In the meantime, savvy investors and prospective buyers will stay far away from the remote suburban housing developments that litter the outskirts of our major metropolitan areas. While these houses are often huge and full of top quality amenities, they’re simply too far away for any but the retired and semi-retired to reasonably consider making their home.
Services are already spotty in these areas, and as the nation as a whole becomes more eco-conscious and fuel costs emerge from their current swoon, demand for McMansions in the exurbs will remain low, perhaps indefinitely.
Tags: bottom, exurbs, foreclosure, homebuilders, Housing, housing starts, mcmansion