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No question—housing construction is slowing. The Census Bureau said today that starts on privately owned housing in December ran at a seasonally adjusted annual rate of 1.93 million units. That’s down almost 6% from a year earlier. It’s also the first time since last March that the annual rate has been below 2 million.
This is …
*Bad for construction workers
*Bad for homebuilding companies because it means their sales will fall
*Good for homebuilding companies because the drop in construction lessens chances of a glut
*Bad for real estate agents, because there’s less new inventory to sell
*Good for home sellers because it means there’s less fresh supply to compete with
*Bad for homebuyers who were hoping for the same glut that homebuilders fear
Did I leave anything out? Oh, yeah:
*Good for crows. The corn fields they feed on won’t be bulldozed under for subdivisions quite so quickly.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.