Dec 19 2007 1:18PM | Permalink | Email this | Comments (0) |
Blog This! using: Blogger.com | LiveJournal |

... and I do feel fine. (all apologies to Michael Stipe and his mates)

I'm not going to say that yesterday's housing starts numbers were good, but I don't think it's the disaster that the consumer media is playing it up to be today.

Here's why: I think it means builders are finally coming to grips with the reality of the market. They need to stop building houses, plain and simple. Depending which number you look at, there's somewhere around a year's worth of inventory on the market. Think about that – if nobody built a house, if nobody put a single house on the market, it would take a year to run out of homes. I mean, that's just staggering and depressing to anyone working in housing whether its new construction or remodeling. This is the type of thing that makes your potential customers reluctant to remodel. (We're going to be talking about this in the January issue, along with other challenges coming in 2008 in an article by chief editor Mike Morris.)

The point I'm making is that, in the long run, this slowdown in production is good for the market. We have to get back to reasonable levels of inventory before the market ever recovers. I realize it means short-term pain for builders and their employees and families (which trickles down to remodelers when they jump into home improvement). The reality is there's no easy fix, no matter what various plans the government trots out for bailing out subprime borrowers or regulating lenders.