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Location: Mars Hill, NC, United States

A small, highly personalized real estate firm specializing in mountain homes and land in greater Asheville.

Wednesday, July 22, 2009

Housing Starts, June, 2009

The Census Department released its monthly series on housing construction late last week. Let's go behind the headlines and see what happened.

Calculated Risk notes that new permits, starts and completions were down 56%, 46%, and 27% respectively from one year ago.

Paper Economy examines the all important single family segment where we see permits, starts and completions down 28.9%, 28.2%, and 36.1% respectively from June, 2008.

The Big Picture looks at the same data and takes several media outlets to task for emphasizing the rise over May, 2009 as being significant.

This is another example where typical seasonality in real estate gets ignored by mainstream media outlets. That is to say, permits, etc, always rise in the first half of the year.

Ignoring the fact that the last thing the real estate market needs is more inventory in the form of new homes, then the question would be how the most recent construction data compares to what it did in the past.

Does this June, or the first half of 2009 show us anything of promise in new construction? Click for some graphic evidence showing single family starts since 1969. 40 years worth of Junes, none lower than this one.

In the end, the depressed building numbers are a necessary evil to reduce inventory as a partial remedy for recovery. This fact will remain, no matter what fluctuations might come in succeeding months of construction data.

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Filed Under: Real Estate Analysis, News, & Data

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