When Bad News is Good News

The talking heads were decrying the low number of housing starts that were reported the other day. They opined that the world was coming to an end, or least, the housing market was swallowed up into a black hole.

Well sure the numbers were down. The lowest ever recorded, since they started recording these things.

But they (those pundits) miss the importance of these numbers. With fewer homes being started, this gives us a chance to sell off the existing inventory within the next 12 months. There's something close to 3 million newly formed family units each year, and many of them would like to have a home of their own.

Housing bottom? You betcha! And, just from my own observations as the lower priced short sale, REO and foreclosure properties sell (and they are selling), prices will start slowly increasing.

Back in the "old days" our average home appreciated between 3 and 5 per cent a year and most people were thrilled with that. The bubble years of 15, 20 and 30 per cent of appreciation is gone. I, for one, would be happy to start seeing that good old 5 per cent appreciation. Will it happen? Yup, just don't know when.

In the meantime, with our subdivisions down by $50,0000, $100,000 or more, we're just delighted that homes are selling. And, hope that the appraisers can bring in a reasonble price. But that's another blog.

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