Housing construction has cooled abruptly. Economist David Rosenberg of Merrill Lynch calculates that the number of starts on construction has fallen at an annual rate of 56% over the past three months. Nobody thinks the market will continue to contract at this extreme pace. Rosenberg thinks construction will keep cooling, but not quite so abruptly from now on. His guess: Measured by duration, the housing slump is only in its second inning.
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.