A client forwarded an article from USA Today this morning… Builders are still confident, bucking the anticipated trend of a slowing market.

My comment to him, however, is that plans for housing starts were put into play months ago and builders have to follow through by the time they hit the permit stage. Many of them have already pre-sold units, etc.

If anything, a slowing in homebuilding would shift the supply/demand equation.

Especially in San Francisco, the building is always ass-backwards. There are almost always huge projects coming online (available for sale) when the market is slower (in the fall, for example), or in times like post-9/11 or late 2002. Then by the time the market takes off, the buildings are sold out (at lower prices), leaving the inventory lower. This year would be an exception, of course, with many big South Beach projects selling out quickly in a hot market.

The real indication is the homebuyer. If they’re buying and if there are homes to buy… That’s what I’m interested in.

Right now the inventory is dramatically skewing the numbers, and when this data hits the papers next month, the media will have a field day. Houses are selling, but prices are holding steady and not as many homes will have sold. Should cause people to freak out even further, giving confident buyers good deals till after the first of the year. Once January 15th hits, there will be no inventory and a bunch of bonus-rich buyers…. Just like the last 10 years…

Of course, that’s my $0.02.

This entry was posted on Wednesday, October 19th, 2005 at 4:52 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.