Doing a double take on housing starts
By: PAUL JACKSON
March 17, 2009 11:31 AM CST
My gut reaction to today’s better-than-expected housing start figures? Indicative of supply inertia moreso than any real demand, esp. in terms of permits. At least one well-known analyst seems to have agreed with me:
So why are permits up? Well, says building analyst Ivy Zelman, “This is supply. It is not indicative of demand.” She notes that builders, and the banks funding them, have money in the ground already, in finished lots. “You have to put a house on it. Vertical construction continues even though demand is not strong.” If you don’t put a house on it, the land is a total loss. If you put a small, cheap house on it, maybe you can recoup at least the cost.
CNBC’s Diana Olick has much more in her post that’s worth reading on this. But the starts number here might not be all that it seems; be careful reading too much into it.
Print This Article
Get your HW Fix
Join nearly 10,000 bold subscribers who already get our daily email delivered to their inbox -- it's free, and a great way to ensure you don't miss something.
Events
2009 Dec 09 -- 2009 Dec 10
RMBS: Assessing Value and Risk
This two-day course in New York City will equip market participants with the knowledge and skills to evaluate prime, Alt-A and subprime RMBS portfolios in order to assess their value and understand inherent risks. For more information, visit www.fitchratings.com.
2010 Jan 13 -- 2010 Jan 14
2010 Collection Technology Summit
The Collection Technology Summit is the first industry event to focus solely on collections and its associated technologies and continues to draw top executives from the nation's most prominent institutions. The Collection Technology Summit, where innovation happens. For more information, visit www.collectiontechnology.net
Got something to say?
Remarks by first-time commenters will not appear immediately, and must be approved before they will appear. All comments are subject to HousingWire's usage policy.