Daniel Herkes

Housing's Big Picture Isn't Pretty

Another problem, possibly serious, is the long term psychological effect of the uncompleted subdivisions that dot the U.S. landscape. These "ghost towns" don't look very good; denuded of topsoil - only the most arduous weeds can purchase a foothold - yuk! Even if the communities succeed in rezoning the failed subdivisions, the mind set will settle with the consumer that "this place did not make it." A failed developed will not replace the topsoil, A failed developer cannot not correct the disrupted drainage caused by the exposed clay pan. The surrounding neighbors will not forget the uncut weeds, and the coyotes that have made dens in the dirt hills. These stimuli produce a decidedly negative mindset . . .

As long as the empty subdivisions set potential buyers will avoid the poignant memory of a failed dream, and fail to respond to the lure of a new house. Well, it's only new until you buy it! The longer they set, the more powerful the memory.

As Housing Market Struggles, Homebuilders Focus on Survival

Good analysis. A couple of questions.

" . . . You've got markets like Las Vegas, for instance, where 60% to 70% of the resales are now either short sales or foreclosures." Will the halt in foreclosures depress the prices to the point that a potential buyer will look to a house only as a domicile? Prior to the recession, houses were discretionary purchases, i.e. the McMansions.

" . . . sacrificing margins for sales" Since the builders are sitting, and not adding to the surplus, will the next housing trend be so marginal as to be trivial?