It should come as no surprise that the housing construction sector is in the tank right now. Yet, another tank, The Online Think Tank, estimates that it will be well into 2010 until things return to normal. Currently, housing construction is at a 14-year low. New Housing starts are about as low as they have ever been seen when you compare the new homes being built against the total number of homes.
Can things get any worse? Well it just so happens that the answer is yes, but do recall that 14-years ago it was 1995, which was a pretty dismal year in the housing sector and interest rates were very high to boot. With more and more foreclosures hitting the already existing unsold housing markets, there is virtually no one in the market for a new home at all.
Top that off with the problem of increased loan application scrutiny, high down payment requirements and credit score demands of homebuyers by lenders, and you can see where all this is going; not up! With residential real estate tanked, the banking industry under the gun, construction down, well, what else could go wrong? How about the spill over effect into the small business sector, service sector, new autos and retail sector. Yes, all affected too, and their outlooks are not much brighter either.
The Economic Stimulus Package will help retail, small business and service industry and if folks (consumers) are told to buy US products and spend money locally, then these sectors may be able to do what they have historically done. Hold up the US Economy. Nevertheless, the Online Think Tank is calling for 2010 – 2011 until new housing construction rebounds to the good old days.
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