Data dive set to continue: Housing starts may be worst since 1940s, deflation also expected

[marmar]

from MarketWatch:



ECONOMIC PREVIEW
Housing starts expected to hit half-century low
Consumer prices falling at fastest pace in 60 years, economists say
By Rex Nutting, MarketWatch


WASHINGTON (MarketWatch) -- Few observers have ever seen anything like the economic data that will be released in the coming week, with the consumer price index and housing starts each expected to breach records dating back to the late 1940s.

With the global economy descending into a nasty recession, the October data could send a chill down the spine of policymakers, who are pulling out all the tricks in their tool kit to prevent a wider meltdown.

As everyone knows, this downturn began in the housing sector, with a global credit bubble inflating U.S. home prices, and homebuilders responding with a frenzy of construction. Now that the bubble has collapsed, everyone is looking to housing for any sign that the worst may be over.

Treasury Secretary Henry Paulson said last week that "market turmoil will not abate until the biggest part of the housing correction is behind us."

It's not behind us yet.

In October, credit markets essentially stopped working, which constrained potential home buyers' ability to find a mortgage. For home builders, it was the latest in a thousand cuts that have destroyed confidence about their industry. .......(more)

The complete piece is at: http://www.marketwatch.com/news/story/Housing-starts-seen-lowest-over/story.aspx?guid=%7B4CA0BEBE%2D9AAF%2D4F47%2DAEE8%2D86042D8CEB2D%7D

[BlueManDude]

1. I saw somewhere that 50% of home sales in Cali were bank-owned properties.

Interesting.

[Ichingcarpenter]

2. My house in Denver was a Boarding House in the 30s

It still had dead bolts on the bedroom doors when I moved in.
The house was over a 100 years old and when it made it was considered a
middle class home in the 1890s. The house was badly modified in the 30s to
change its role from a single family home to a boarding house. The zoning was
also changed to an R-2 status as most of the homes in the area were turned into
apartments or boarding houses. In the mid 90s the houses were taken back to
single family dwellings. Now the trend is reversing itself

I'm seeing a lot on the web that room rentals and boarding house arrangements
are coming back into vogue because of economic necessity. This housing mess
is not gonna go away in 4 years because the majority bought before the housing
prices crashed thus leaving little or no equity to move on.

[blue_onyx]

3. The housing issue is such a mess

Our newspaper today came with a foreclosure list. The list was thicker than the rest of the paper combined. We had a house a few doors down from us go for 37,000 when houses in this area usually go for 150,000. We're actually trying to sell a condo. It would've went for 175,000 a year or two ago....we'll be lucky to get 130,000 now. I hope this "housing correction" is behind us soon but I'm not too hopeful.