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Inventories of New Homes at 15-Year High « Robert J. Abalos Real Estate Watch
By admin | June 25, 2007
Inventories of New Homes at 15-Year High « Robert J. Abalos Real Estate Watch
Inventories of New Homes at 15-Year High
“The inventory of previously owned homes up for sale in May rose to the highest level in relation to sales in 15 years, a real-estate trade group said Monday.
Sales of existing homes fell 0.3% last month to a seasonally adjusted annual rate of 5.99 million, down from the upwardly revised 6.01 million in April, the National Association of Realtors reported.”
To read the rest of this article from MarketWatch click here.
I’ve been predicting this trend for months now in this blog. New home inventories will keep rising and I see no immediate relief in sight for the beleaguered homebuilding sector. They are trying desperately to cut supply but there are too many homes (including condos) under construction, vacant, rented and not owner-occupied, owned by flippers who want out, and other sources of supply not reflected in the building permit and actual construction numbers.
Simply put, there are just too damn many homes for sale. It’s like playing musical chairs when there are fifty chairs and only six people in the game.
The worse news from the NAR report is that the current overhang of inventory is the largest since June 1992 when the U.S. was coming OUT of a housing price collapse.
Think about it. Conditions now are as bad as at the END of the past U.S. recession. And the U.S. economy right now is not even in one. GDP growth is still positive, if tepid. Can you imagine what will happen when we cross that negative growth economic bridge sometime in early 2009?
Topics: Commercial Real Estate |