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MsMorrisine

20% rise in housing starts and no conspiracy theory posts (yet)

derryb

oops. you missed my post in another thread:

"Fails to provide how much of the single family data is custom (already sold) and how much is speculation (track builders betting on a future sale). I suspect it's mostly the speculators, many of whom weren't around in 08 to get caught with their pants down.

I gotta stick with the bad vibes on this data. Do not lose sight that housing starts are actually additional debt. How much of this additional debt goes bad (variable rate loans?) and eventually gets bundled into marketable products remains to be seen.

To me healthy economic data involves consumers spending money they have, not future earnings from a job that may not be there in the future."

MsMorrisine

Not conspiratorial

We need people claiming the gov't is painting the tape.

johnny9434

nothing wrong with that

derryb

The real question on this data is what does it really mean?

For me, it's more spending of future money - debt. While it is the best kind of debt (if that spec house gets sold) it is still additional debt in an over indebted economy. If that spec house doesn't get sold then it becomes a more serious problem for the economy. Increased housing sales would be more optimistic than housing starts.

Tells me speculation in new houses has increased. Could be good, could be bad.

Justacommeman

A lot of our PM fraternity appear to live below the earths surface so getting the news through normal means isn't a given. Patience, the rebuke will come

Mark

OperationButter

<< <i>The real question on this data is what does it really mean?

For me, it's more spending of future money - debt. While it is the best kind of debt (if that spec house gets sold) it is still additional debt in an over indebted economy. If that spec house doesn't get sold then it becomes a more serious problem for the economy. Increased housing sales would be more optimistic than housing starts.

Tells me speculation in new houses has increased. Could be good, could be bad. >>



I can only share what I see first hand.

In the new construction development that I am looking at, it is a single story community all nice beautiful homes. The surrounding areas do have single story but mostly consist of two story, old and new construction. Old construction is only about 10 years old (not old to many parts of the nation with respects to homes). There are 6-7 major home builders building within a 10 or so mile radius, all around similar price points, 400-600k. They are getting homes built quick, 4-5 months, and the communities are selling out fast. They anticipated 2 year durations for selling homes and are selling out in 10 months or less. The agents that I talked to (as well as family that are agents in the town, but not on these new devs) are telling me that the demographic is 30 somethings buying their first house with low down but still qualifing with low down (with interest rates between 3.5-4%) or couples that are either in retirement or close to retirement. Most of these sales were not all cash as they said its prob 10% of their sales. The town has major all cash buyers, but they arent going after new home construction from what the agents are saying.

While I think a few could be speculation, Im leaning on more towards people overextending by not having the down payment and banks still lending to them.

MsMorrisine

I thought we went through a housing glut

I need to double check the 20% to be sure it is not off some absurdly low comp.


Well before the implosion I knew of people from work who jumped in on RE "investment" via 2nd homes. I do wonder if that "investment" is happening again.

Baley

Don't blame me, I'm buying a "used" home

MsMorrisine

In the aftermath, supposedly one of the lessons learned was low down payment sales were more likely to go into foreclosure than those with the typical 20%

TwoSides2aCoin

I changed my sigline for this thread

derryb

"take the April data with a grain of salt ... maybe a tablespoon full"

Overdate

<< <i>20% rise in housing starts and no conspiracy theory posts (yet) >>


That's because it's not a conspiracy . . .

At least that's what they *want* you to believe!

DrBuster

<< <i>A lot of our PM fraternity appear to live below the earths surface so getting the news through normal means isn't a given. Patience, the rebuke will come

Mark >>



Ha, I chuckled with this one.

MsMorrisine

wsj article with flash(?) graphics


Looking at the graphics in there, the comps were easy and the data noisy.

We may be on a slight up trend, but with the noise it is hard to tell.

One thing is certain, 20% was definitely due in large part to an easy comp.



(re: up trend. there is an obvious up trend. however looking through the last few months' noise it is making me wonder if we've hit a flat spot or not. a few more months' numbers will tell.)

derryb