Housing.com News, Analysis & Opinion: Housing Bubble: Mock The Stupid

The latest report from the Commerce Department shows a nearly 9 percent decline in new homes and apartments being built. Couple of interesting notes from the article:

Despite the tumble, "construction was started on 2.064 million single-family homes and apartments last year, the second-highest level on record, exceeded only by 2.356 million units built in 1972." I'll be getting a copy of the report to see if the construction stats match my theories about the Midwest housing boom.

He said he was looking for construction of new homes and apartments to drop by about 6.5 percent in 2006 with sales of new homes falling by a similar amount.

It'll be interesting to see if that estimate holds true for all of 2006. Thanks to the wonderful blogmistress at Housing Finance, we have a clue at how federal agencies are viewing the new construction focus of housing. Specifically, if this multi-agency report is any indication, they're quite worried about it:

In the past, weak CRE loan underwriting and depressed CRE markets
have contributed to significant bank failures and instability in the
banking system. While underwriting standards are generally stronger
than those during previous CRE cycles, the Agencies have observed high
concentrations in CRE loans at some institutions. The Agencies are
concerned that these concentrations may make the institutions more
vulnerable to cyclical CRE markets. Accordingly, institutions with such
CRE concentrations should have both heightened risk management
practices and levels of capital that are higher than the regulatory
minimums and appropriate to the risk in their CRE lending portfolios.

"CRE" stands for "Commercial Real Estate." Boy, where were these guys when condos actually sold for less than $300,000, eh?

If that is the only way to get yourself the best wealth generation tool in history, do it. I am more concerned about the lack of deferred gratification young homeowners can exhibit. The mature homeowner makes their house payment, even if they eat beans for dinner
Steve Dexter

"If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years. It's as if you had 500,000 dollar bills stuffed in your mattress.... [It's] very unsophisticated.'
-- David Lereah, chief economist of the National Association of Realtors and author of "Are You Missing the Real Estate Boom?"

There's a part of me that wonders if Lereah and his ilk pay trolls to spam news sites and blogs with crap like Dexter's. Hey, if pay-to-play is good enough for Richard Scrushy...

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The latest report from the Commerce Department shows a nearly 9 percent decline in new homes and apartments being built. Couple of interesting notes from the article: Despite the tumble, "construction was started on 2.064 million single-family homes and apartments last year, the second-highest level on record, exceeded only by 2.356 million units built in 1972." I'll be getting a copy of the report to see if the construction stats match my theories about the Midwest housing boom. He said he was looking for construction of new homes and apartments to drop by about 6.5 percent in 2006 with sales of new homes falling by a similar amount. It'll be interesting to see if that estimate holds true for all of 2006. Thanks to the wonderful blogmistress at Housing Finance, we have a clue at how federal agencies are viewing the new construction focus of housing. Specifically, if this multi-agency report is any indication, they're quite worried about it: In the past, weak CRE loan underwriting and depressed CRE markets have contributed to significant bank failures and instability in the banking system. While underwriting standards are generally stronger than those during previous CRE cycles, the Agencies have observed high concentrations in CRE loans at some institutions. The Agencies are concerned that these concentrations may make the institutions more vulnerable to cyclical CRE markets. Accordingly, institutions with such CRE concentrations should have both heightened risk management practices and levels of capital that are higher than the regulatory minimums and appropriate to the risk in their CRE lending portfolios. "CRE" stands for "Commercial Real Estate." Boy, where were these guys when condos actually sold for less than $300,000, eh? Let's take a moment to visit Inman, and the future head of NAR, Steve Dexter: If that is the only way to get yourself the best wealth generation tool in history, do it. I am more concerned about the lack of deferred gratification young homeowners can exhibit. The mature homeowner makes their house payment, even if they eat beans for dinner Steve Dexter From the old days: "If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years. It's as if you had 500,000 dollar bills stuffed in your mattress.... [It's] very unsophisticated.' -- David Lereah, chief economist of the National Association of Realtors and author of "Are You Missing the Real Estate Boom?" There's a part of me that wonders if Lereah and his ilk pay trolls to spam news sites and blogs with crap like Dexter's. Hey, if pay-to-play is good enough for Richard Scrushy...