A really, really, really bad time to be a carpenter

Posted by: Peter Coy on April 16, 2008

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The March report on housing construction was even worse than economists expected. Starts on construction of homes fell twice as much as expected. They dropped 11.9% in March from February, leaving them at their lowest point since 1991. A big part of the decline was starts on multifamily dwellings, which tend to fluctuate a lot. Analysts say the number to pay attention to is the decline in starts on single-family homes. That was off 5.7% from February, making it the 12th monthly decline in a row. Believe it or not, single-family starts in March were 63% below their record level of January 2006, when they were going at an annualized rate of 1.84 million.

David Rosenberg, North American economist for Merrill Lynch, says this is “turning out so far to be among [the] worst housing cycles in recorded history.”

Amid such gloom, it might seem strange that a new Reuters/Zogby poll has found that a majority of Americans think this is a good time to buy a house. But the two things aren’t necessarily contradictory. The steep drop in housing construction is reducing the oversupply of unsold homes, which will eventually lead to a firming of prices. I’m not saying that the bottom for housing prices is here or near, but the pain suffered by carpenters today is going to translate into gain for homeowners sometime in the future.

Reader Comments

Ari

April 17, 2008 11:00 PM

You could always move to China. They need a lot of carpenters.

Landflip

April 18, 2008 2:16 PM

Hopefully people will buy some of the older homes that were built in the 50's and hire these carpenters to do some of the renovations. It seems like you can get more for your money by doing rather than trying to purchase one of these "overpriced" houses that someone paid to much for several years ago!

mxw1420

May 1, 2008 2:58 PM

Its low ball city on house offers, how low will u go to move, day of the flip is gone baby gone, in this market

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About

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.

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