More Good News! Housing Starts Continue to be Down

OK, so it isn't conventional to think of this as a good sign, but, it is imperative that this trend continue if we are to get out of this slowdown anytime soon. We simply have too much inventory and fewer housing starts contributes to lowering inventory. The federal government reported today that housing starts are down about another 6% bringing it to 50 year lows. Here is an excerpt from the report:

"Privately-owned housing starts in September were at a seasonally adjusted annual rate of 817,000. This is 6.3 percent (±12.0%)* below the revised August estimate of 872,000 and is 31.1 percent (±8.3%) below the revised September 2007 rate of 1,185,000. Single-family housing starts in September were at a rate of 544,000; this is 12.0 percent (±8.3%) below the August figure of 618,000.The September rate for units in buildings with five units or more was 254,000."

This is how the system self corrects itself and will help to balance out the supply with the demand. The Atlanta real estate market is certainly in need of a slowdown in housing starts because of the glut of new construction homes now clogging up the system with spec homes stagnant...lowering prices and still sitting; many of which are being turned back over to banks.

I can't think of any other way for us to get out of this than lowering supply. Sure, other factors come into play, but, without a reduction in supply, we will continue to be mired in the real estate slump in which we currently reside.

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