CALIFORNIA NEW HOME CONSTRUCTION FALLS 62%
According to the latest data from the California Building Industry Association (CBIA), new home construction starts in California fell 62 percent in January. Chief Economist Alan Nevin said the drop in new residential projects breaking ground coupled with the ongoing push to move existing inventories, carry the potential to produce a "severe shortage" of new housing once the real estate market rebounds.
Mr. Nevin also said “We have rarely had a situation where interest rates are low and the California economy is stable and yet there appears to be a hesitancy among potential home buyers to make the critical purchase decision. We do know, however, that within the near-term future, the market will decide, often en masse, to begin the home buying process, but this time there will be a severe shortage of new product. On balance, we foresee a critical housing shortage evolving throughout California.”
Naturally, I personally would like Mr. Nevin to be correct, but wonder if a "severe shortage" in new new California housing will occur in the face of these factors:
A. In San Diego, and many other California cities just about one in ten of the average households can afford the average home. Without adjustable loans, 100% 'no doc' loans, etc., even at today's lower values, where will the qualified home buyers come from?
B. With 2008 set to see record home foreclosures, a lot of housing supply is being created.
C. With people waking up to the realization that California housing values can decline, combined with the passing of the 'Baby Boom' house buying generation, California housing just might lose its 'best ever investment' status and return to the traditional view of a place to live and raise your family.
Comments are closed.
California housing shortage? Yes, for low income housings, but, this is just another real estate ‘insider’ trying to create buying demand!
Best bet..Buy Australian GOLD nuggets!
Everything is dropping! Those discussing the large drop in home prices that need to happen are failing to mention that the nominal price will not fall that far because Bernake is inflating the market; real prices will fall 30%+, however.
Drake
A house is worth no more than what someone is willing to pay you for it. No buyer? Value = $0. House prices have held steady throughout the past 100 years in the US at 3x median income of whatever area you study… because every house you build must be affordable to the workers within the surrounding area.
Marisa
San Diego County Dentistry
So how bad is it? I hear all these ramblings, fancy financial terms and so on. But what does it all really mean? Does the US collapse? Do we see soup lines and down trodden people like the experience was during the Great Depression? Seems to me the US financial catastrophe is pretty simple. Our government and the citizens of the US have consistently spent more than they take in. At some point the debt becomes so great we are unable to pay it back, or manage it. When we are no longer able to pay our debts what happens? Do we surrender assets, land and military hardware to the foreign nationals we’ve been burrowing money from over the last two decades? Maybe a fire sale of America? The whole system is a sham and we only have ourselves and those shysters in Wall Street and the Scum of Washington DC to blame..Sorry to say but, neither McCain, Clinton nor Obama will be able to save us from this SNAFU. The concept of uncontrolled spending and deficit through credit has finally caught up with us. This decade is perhaps a time for reckoning in which our short sighted ways and embrace of Wall Street’s psychopathic free market capitalism garnered by greed and unequaled corruption will finally get the best of us..
Ethan
San Francisco California Lawyers