There are several indicators to look for to see if housing starts are going to slow down. Many people in the housing industry look at lumber prices and orders, as well as other housing material orders.
It recently occurred to me, while talking to a friend of mine in the blueprinting business, that if house plan orders and printing of blueprints slows down, then a housing start slowdown is surely on the way. This was kind of like a light bulb going off in my head.
In Tuscaloosa, Alabama, there are more houses on the market than ever before. I keep wondering when it's going to slow a bit to allow for the buyers to catch up, but builders just keep building.
Personally, from being a builder myself in the past, I think that the local builders can't afford to stop building because they have been living off of the construction draw money that they receive from the local banks. This is a dangerous situation to be in and at some point, the piper must be paid.
I surely don't want to be perceived as being negative, but I think that there are going to be some builders in trouble soon, especially in Tuscaloosa, Alabama - just check with your local blueprinter to find out.
I'm a former discount real estate agent who now believes that real estate agents should get paid as much as possible - they deserve it! Todd Murphy State Farm coming soon...
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Todd- I agree you said "Personally, from being a builder myself in the past, I think that the local builders can't afford to stop building because they have been living off of the construction draw money that they receive from the local banks. This is a dangerous situation to be in and at some point, the piper must be paid."
In Osceola County,Florida; we have an excessive amount of new inventory. This is causing builders to offer many incentives and price cuts in attempts tosell off inventory in a lackluster post boom market. It is also making it a little more difficult for owners of existing homes to compete. Many are still in denial as to what the true CURRENT market value of their homes are.
Some Realtors, have taken a tactic of not accepting high price listings as it puts a strain on the smaller Brokers budgets. Rather than carry the financial burden of a listing that simply won't sell. Advertising costs, marketing costs and probability factors based on comaprable selling prices help trim the fat out of many properties that will languish. The rise in foreclosures are also impacting our local economy. It is possible that this situation will get worse before it gets better-but it will eventually get better.
Thanks for the comment, Bill.
Allison - it definitely will get better, and I do agree with you that sellers are still in denial. I will turn away an overpriced listing in a heartbeat at this point.