Homebuilders losing confidence in the recovery

I would be losing confidence as well.

There's already A TON of houses and buildings... what a waste to build more.

I wouldn't want to be in the homebuilding business these days. Remodeling would have more opportunity, but there's a limit on how many companies can get the few jobs available. The problem with the overheated housing market is that many people were making good money. There is just no call anymore.

One of my local papers published a weekly report called "condo watch." At one point there were 44 buildings being built just in the downtown area. Some of these were huge complexes. All higher end, starting at 250g for one bedrooms, etc etc. Just who did they think were going to buy all of these condos? Downtown Minneapolis just isn't that big. I did not need to be an economist to know that there was no way they were going to be able to fill all those projects, especially at those prices. A one bedroom highrise apt for 250g? This isn't Manhattan. People could buy a perfectly nice house with a yard and a garage for that.

Yet these projects got financing and were planned to go forward. Now when I drive to work (I work downtown) I drive past three 1/2 finished buildings, just abandoned. Same with the glut in commercial properties. Huge, high-class high rises sitting empty, and they were building more and more. The only thing they succeeded in doing is making it impossible to park, since they tore out all the cheap lots.

There is no confidence in the housing market because it would require people to have jobs to pay for the houses. If we don't have jobs we don't have money to spend. Simple as that...

I really feel we are in for a long haul as far as the economy is concerned. The middle class may never be the same. I don't think we will see true signs of recovery for another 10 to 15 years. People don't have jobs, and what jobs there are have a starting wage for sometimes half of what it used to be.  We need to pay down our national debt now, or we are going to be in serious trouble.   People aren't building new houses because there is such a backlog of already built houses selling for much less then their appraised values. 

 

I know of two more families losing their homes - one denied on the Making Home Affordable program, the other is just walking away.
We should all hunker down and pay off our personal debt, at least that is my plan.

I think it applies to areas with huge job losses. In my suburb, the new homes are selling. EVen though they are getting very strict about granting new mortgages, people here have had approvals ...good credit ratings...and the housing starts seem to be on the upswing.