Garza - Post #3
Really? Do you think so? Here's an article with analysis that probes the probability that homebuilding won't recover in 2011.
Now, even though it was published on November 3, 2010, it's still nice to think about it because according to the author, "Of course, even if there is growth in housing starts, what does it matter if those houses don't sell?"
I am going to agree that home building is not recovering. The market is over-saturated. On the demand side, it is in people’s best interest to buy a already foreclosed home or any other home that the article labels as distressed inventory, instead of have a builder create the home of their dreams. For example, if I am seeking a home that has a specific style and want a certain location, even though 15 or 10 years ago is would not seem unpractical to build a house costume made for my wants in a newly developing neighborhood today I would just settle for a house with similar qualities because I know I can buy it for a lower price than its worth. On the supply side, builders and developers are not going to build for the residential market when they know the millions they spend in building will not be a smarts investment- newly developed house won’t sell when their competition is very inexpensive foreclosed home. I believe right now builders are focusing their efforts on commercial property.
ReplyDeleteI agree with Bianca, increases in home building do not signify a financial recovery necessarily. It could be the start of people living outside their means again instead of making the financially smart decision to buy a foreclosed or pre-built home. It could also just be a sign that the rich are just getting richer while the poor just get poorer. This could very well just be a sign that the so-called middle class is diminishing in light of a more "bourgeoisie/ proletarian" America
ReplyDeleteI agree as well. Also, based on our reading, it seems that there are a lot of half finished properties left on the market. The developer cannot find the funding to finish them, or consumers to buy them. In my opinion, it would be pointless to start building more houses, when there are so many finished and partially finished ones on the market that nobody is buying. Over time markets change and people need to make adjustments. I think that in the future, this market will begin to recovery, but will never reach its former glory that it had in the real-estate bubble.
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