U.S. Home Construction Ends Worst Year Since 1959

[Purveyor]

Source: International Herald Tribune

New-home construction fell to record lows in December as jobless claims continued to soar, the government reported Thursday, another sign of the dire economic conditions facing the Obama administration.

New-home construction fell 15.5 percent from November to December, to an annual pace of 550,000, the slowest pace on record, the Commerce Department reported on Thursday. Home builders have all but shut down projects as home values plunge and potential buyers stay on the sidelines of the troubled housing market.

"What you're seeing is capitulation by home builders," said John Lonski, chief economist at Moody's Capital Markets. "The news you got today reinforces the view that stabilization of housing starts is well off into the future."

The pace new-home construction in December was 45 percent below its levels from a year ago. For all of 2008, the government estimated that 904,300 housing units were started, a drop of 33 percent from 2007. Last year would be the worse for housing starts since records started to be kept in 1959.

Read more: http://www.iht.com/articles/2009/01/22/business/23econ.php

[whistle]

1. Suppose new home construction is bailed out and stimulated

...who can afford to buy new homes? Joblessness will hit 9.0% or more this year. Stop the foreclosures, put in bankruptcy protection measures, stimulate real job growth projects.

[Baby Snooks]

3. More like 15%

The actual figures for unemployment are estimated to be around 15% - the government doesn't include people who are no longer receiving unemployment but are still unemployed or underemployed.

Reality is our economy is collapsing. Some sectors have arleady collapsed. We are in a depression. Not a recession.

[Purveyor]

6. The last thing needed right now is new homes. CNBC reported this morning

that there are some 4 million houses listed for sale and on the market. The worst part of the report is that there are still some 15 million vacate houses that the banks haven't even bothered to list due to market conditions.

It is going to take a long time to absorb all that vacant inventory.

[patriotvoice]

2. Put people to work building things people overseas buy from us, not building things we buy here.

Manufacturing and exports must be the new growth industries.

[Baby Snooks]

4. Who has money?

The economy in other countries is collapsing as well. So much for the new world order of the Bushes.

[patriotvoice]

8. China and Russia are two big countries with lots of liquidity.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

I would argue any country with less than 25% public debt is healthy enough to switch to importing instead of manufacturing... same thing we did 25 years ago.

The only question is their willingness to spend it. Since everyone needs clothes, transport (planes, cars, bikes, shoes), food, and vices (cigarettes, drugs), there's always a market. Prices here need to come down so that we can pay people less so that we can be price competitive globally.

I'd also suggest not putting all our eggs in one basket. With the energy situation, it would be unwise to switch heavily into exports -- much more has to be done locally, like putting farmers markets closer to population centers or at least in existing groceries. Manufacturing of bicycles and economical "city cars" (primarily hybrid) and "country duty" (primarily diesel) would permit localized money from from manufacturer to consumer.

It's a big problem, with lots of interlocking dependencies. No magic bullet will fix it, but I think fundamentally the solution lay in manufacturing: producing what we need and the surplus to sell elsewhere. A high import tariff would go a long way to making that happen....

[Baby Snooks]

10. China....

Why would China import what it's already exporting? To help us out?

[patriotvoice]

14. Because they can afford to stop manufacturing... and live the good life...

like we did, in the 80s. When we ditched manufacturing in favor of a service industry, favoring cheap imports over relatively expensive imports, favoring credit over savings. China's time for that is on the horizon.

[xchrom]

5. wow -- that's huge. -- more people out of work, damn. nt

[Ganja Ninja]

7. Ever notice how every time something starts with ...

"Worst year since ...." It's always a year when a Republican was in the White House?

[HopeHoops]

9. Well now THERE is some shocking news (yawn) - sorry. What were you saying?

How can you buy a new house when the banks aren't even approving car loans unless you pledge your first born and the child has good teeth?

[FarCenter]

11. The decline is mainly in single family homes

In structures with 5 units or more, the decline is very modest and in some cases an increase, depending on the region of the country and whether you are talking completions, under construction, or starts.

[raccoon]

12. Why was '59 a bad year? nt

[HopeHoops]

13. Not for wine. Now 2009, that's going to be a GREAT year for Republican whine!

[Gregorian]

16. It's a bogus comparison. In 59 America was building massive developments.

59 was when we were in the midst of nationwide developments. We were busy destroying beautiful parts of the country. Paving the San Francisco bay area with houses.

Actually I think the comparison is bogus in the direction that makes it look better than things really are. If one considers home building good. I personally hope it comes to a crashing halt. But there were fewer than half the people on the planet back then than now. So if it's bad compared to that, then it's bad.

This is a subject I find hard to be rational about. I deplore what we've done to the country. But then, if people have babies then there will be more houses. And that's partly what is happening. The baby boom is fading into history. Or I hope it is.

[Barrett808]

15. If you want an idea of just how deep this depression will be, check out these graphs:

http://desdemonadespair.blogspot.com/2009/01/some-grim-economic-numbers.html