Housing Excess Looks Good, but Not That Good

The excess supply of housing units is being worked off quickly.  Here's the picture for new single-family homes:

We've made a lot of progress towards a normal inventory of unsold homes. At the rate we're going (and not making any forecasts about changes in new construction or home sales), we'll be down to a normal inventory of unsold new homes by May of next year.

However, it's not quite that good. There are many excess existing homes on the market. The overall vacancy rate is still very high. It will be much longer for the total housing inventory to look decent. Still, this is good news today.

Comments

[specks:]

All of the statistics I see relate to most recent times. Most realistic pundits categorize this particular crisis to at least the 1930's. Why don't we have a look at what housing did during that period? I understand that job loss is not supposed to be as severe but why not have a look see anyway. This would be interesting info, wouldn't it?

2008 Sep 27 10:23 AM

[GVillageNYC:]

What does the horizontal line across the graph represent?

2008 Sep 27 11:30 AM

[pochovilla:]

When the trend reverses it overshoots and looks like a 200,000 - 250,000 inventory of unsold new homes may signal a reversal. I would expect that builders will be challenged for several years to build more affordable housing due to high energy prices, cost of credit and down payment issues. This will continue to pressure earnings.
The consumer needs to have control of debt to income, not just principal, interest, taxes and insurance. Car loans, credit cards and utility costs are "virtual (real) debt" that needs to be a factor in the housing affordability calculation. Maybe the range of 2.5-3 X income with 20% down should be the new calculus for buyers as few jobs are providing annual income increases over inflation.

2008 Sep 27 11:32 AM

[Loganthal:]

Just commenting...
User 151885 - Want more info?, well, dig in all you want. Getting to the truth is the new American Dream!

GVillageNYC - That line is supposed to be invisible! It hold up the scribbly blue line. Sorry...

ponchovilla - Should run for President. This plan sounds more interesting than anything heard out of the candidates so far!

Bill Connerly - Good news..? for who? Surely you don't mean the working class... Shame on you buddy!

2008 Sep 27 12:10 PM

[REGIS:]

I suspect that there is a large number of homes waiting to be listed. The resul will be a longer time for healing,

2008 Sep 27 12:39 PM

[WAKEUP:]

Please. Nobody believes that there is anything other than a massive housing excess, and it does not look good, at all.

2008 Sep 27 03:03 PM

[Matt Blackman:]

Builders continue to build more homes every month than are being sold which means they are only compounding their own problems!

See Chart 3 at tradesystemguru.com/co...

2008 Sep 28 05:19 AM

[Joyful Alte...:]

I suspect we all know people who are waiting until the real estate market gets better to put their homes up for sale. There's a pent-up demand that will take years to work off.

2008 Sep 28 06:28 AM