US housing market in ‘deep recession’ as homebuilder confidence tanks: economist

New York Post ^ | 9/19/22 | Thomas Barrabi

[fatboy]

“...Neighbors house sat on market for $690-650K for a year from 1998-1999. in 2020 he re-lists it for $999,999. Sells in a day for $1.2M. Zillow says $1.4 today.....”

The beauty here is if the local market drops another 10%, 10% of 1.2 million is $120,000 that the new homeowner will lose in appreciation equity and could possibly put him/her underwater for years. If enough people do this then look out Irene.

[woodbutcher1963]

August Housing Starts 1.575 (Exp 1.445M), Permits 1.517 (Exp 1.610M)

These are still very good numbers historically.
Let me remind you of the historic numbers to give everyone some perspective.

2004 Starts hit 2.4 million
2008 January starts 480 thousand = .48 million

We struggled for ten years to get back over 1.2 million starts. Most economists believe we need to build 1.4-1.5 million housing units just to keep up with the population of a country with 330 million people. Houses on average only last 75 years.
We did not get to 1.5 million again until just in the last year. Meaning, we under built for ten years.

Covid/ the working from home revolution made the price of houses appreciate in 2-3 years what we would normally do in ten.
Markets like Boise, Tampa, Phoenix, Las Vegas, Denver, etc all appreciated too fast. They are all in the beginning of a price correction. This is mostly effect the price of existing homes over the next two years.
However, markets in the northeast and midwest took ten years to double in price. So, if you waiting to save 40% off the price of a new house in Pittsburgh, you are fooling yourself. Phoenix, it could be in the cards.

Housing prices for new construction are going to come down. They have already. They are not going to come down by 50%. The cost of building a house has increased due to labor and other fixed costs. The wholesale price of 2x4’s is back under $500/mbf at the mill level. It reached a high of $1700. These will eventually reach the retail prices at your local builder yard.

[woodbutcher1963]

Jacksonville is now the boom area of Florida. It is the highest volume of home starts in Florida. Orlando is next.

Dallas/Ft Worth is still the largest volume market in the country. Houston is second.

[EvilCapitalist]

The people who approve of Joe aren’t trying to even buy a house. They still live in their parents basement.

[kearnyirish2]

I’ve warned people that same dynamic is at work in terms of groceries and even stock prices; there are no shortages driving up prices, but rather a devaluation of the dollar.

We were warned of this when “stimulus checks” were being thrown around like candy (under Trump, mind you) but everyone was gettin’ paid so there was little opposition (except from wealthy people who didn’t need it).

[sphinx]

The homebuilders just need to pivot to building affordable housing for the three billion people who are planning on coming to the U.S. if the dems keep control.

[prairiebreeze]

marker

[kabar]

We are going to have a hard landing. Rising interest rates are killing the housing market and the stock market. It is also increasing our debt servicing costs. Every percent rise in the interest rate adds about $300 billion to our debt servicing costs. In 2020 we spent $340 billion on debt servicing costs compared to $800 billion on defense.

[Gay State Conservative]

IOW,the equity I had in my home (which represents most of my "net worth") will now drop by 10%...20%...and maybe more,while my grocery bills are up 30%,my heating costs are up 20% and my transportation costs have doubled.