Our Really Lousy Housing Market

From Zero Hedge:

In its schizophrenic manner, the media across the country lamented the housing-starts numbers, which were ugly: 571,000 annualized in August, down 5% from July, down 5.8% from August 2010, and down 75% from its peak of 2.3 million in January 2006. But for the housing market to heal, that number should be near zero for years.

18 million vacant units, that’s the problem. While some people dispute that number, everyone agrees that the inventory of vacant units is huge. Whether it’s 18 million or 12 million doesn’t change the problem. It only changes the duration of the healing process. This is the hangover from the housing bubble when the industry built millions of units for speculators who never had any intention of living there. And now, no one lives there…

Believe it or not, even out here in Las Vegas some new homes continue to be built – and I can’t see why.  To be sure, if someone actually came up to a home builder and specifically ordered a new home built, I could see that.  But we’re actually arguing right now over whether a developer should be able to start a new, high-end housing development near Red Rock canyon (I’m forthrightly opposed…first off, because we don’t need additional housing in the metropolitan Las Vegas area, secondly because I don’t want to see the Red Rock area marred by another round of cookie cutter houses…and if you do come to visit Las Vegas, do head out to Red Rock; you’ll not be disappointed and its not a long drive…you can even go horseback riding out there).  That aside, the article is right – we should be building zero new homes…now and for  many years.  We’re already glutted…and now that the courts have ok’d it, the banks are about to proceed with another very large round of foreclosures.  The problem will get massively worse before it ever gets better.

As for what to do with all the construction workers – my best idea for them is to shift them over to manufacturing, farming and mining…and, of course, whatever related construction will be necessary for an expansion of those industries.  We simply do not need houses…not only are we over-built but we’re running out of people to put in the houses, anyways.  The Boomers are retiring and, if anything, downsizing their housing…the follow-on generations are much smaller.  The idea that housing will be a core component of American wealth creation is over with  – it won’t be, not for another 50 years, and even then only if we throttle the Culture of Death and start having children again. There will always be a need for some home construction, of course…houses do deteriorate over time, but we’ll not need as much home construction as before.  And perhaps our home builders instead of throwing up cracker box houses can work on building houses designed to last a century with no major repairs?  More brick and stone, less drywall and stucco-over-chicken wire?  Housing which uses wind and solar to provide some  of their own electricity?  Houses that dispose of more of their own waste?  Maybe houses with bigger lots and built to make a neighborhood look normal rather than manufactured?  Just a thought…

A complete re-working of our economy will be necessary in order for full recovery to occur.  As I’ve endlessly harped upon – Making, Mining and Growing things.  We can’t live on home construction, auto manufacturing will never be as premier as it once was…and the cool, electronic gadgets are nice (and we should strive to lead the world in this area) but they can’t provide the literal tens of millions of jobs we’re going to need.  Only getting out there in to factories to make our own mundane items – clothes, tools, etc – and mining our own wealth out of the ground and growing not only our own food, but the world’s food will do it.  And in order to get there, we have to re-work our tax and regulatory systems to ensure that those who are willing to make, mine and grow things are left unhindered and, indeed, fostered by government action.  And even then, good people, it will be 20 years before American prosperity returns fully.

But, we can do it, if we want…now, do we want to?

25 thoughts on “Our Really Lousy Housing Market

  1. RetiredSpook September 21, 2011 / 1:59 pm

    18 million vacant units, that’s the problem.

    Not to worry; the Left has the solution.

  2. dbschmidt September 21, 2011 / 2:40 pm

    I, for one, make sure the “Made in the US” label is on a great deal of products I purchase like tools & clothes. The surprise is that I have never been disappointed with the quality as they outlast the overseas versions. I am in the buy once for life club rather than replace ever year or two.

    • neocon1 September 21, 2011 / 3:25 pm

      our residential work has been down this year but our commercial work has been great

    • Thomasg0102 September 21, 2011 / 3:29 pm

      oh really db,

      tell me, what kind of product you buy that are made in the usa are so good and better than their import counterparts?

      I’d love to hear this.

      • neocon1 September 21, 2011 / 3:38 pm


        do your own research, then tell us what foreign products YOU buy and how they are better than US domestic.
        lets start with YOU
        Iranian = muslem, low quality, low mentality,smelly, and as dumb as a box of rocks…

      • Thomasg0102 September 21, 2011 / 3:54 pm


        I drive a Porsche, I live in a house made mostly with lumber from Canada and built by laborers from Mexico.

        I buy clothes that are Polo and Lacoste brand, but not made in the US.

        I have electronics from Apple and RIM that are made in China and Mexico respectively.

        I like how you are still clinging to the faux image of me, but yet don’t provide evidence.

        You’re a dumb fake marine. nothing more needs to be said.

      • Cluster September 21, 2011 / 4:00 pm

        I buy clothes that are Polo and Lacoste brand, but not made in the US – thomas

        I think you just exposed your true image right there thomas. Polo and LaCoste?? Really? I wore those back in the 80’s.

        Questions thomas – why are you so adversarial? Seldom do you post anything of substance. More often it’s just snide remarks based on some false impression you have of conservatives. Earlier you claimed that the GOP is mostly comprised of religious kooks, which really isn’t close to being the truth, and just because someone does have Faith, does not make them a kook. Funny how Democrats, including Obama, have claimed strong beliefs – do you consider them kooks?

      • dbschmidt September 21, 2011 / 4:16 pm

        Thomas fits the profile of a narcissistic personally (like Obama) to the letter,

        Narcissistic personality disorder is a condition in which there is an inflated sense of self-importance and an extreme preoccupation with one’s self.

        Obviously, he has nothing to offer the world and very low self-esteem so all he can do is lash out how he is so much better than everyone else because he is so much smarter and drives a Porsche and wears xyz. What a complete loser.

      • neocon1 September 21, 2011 / 4:19 pm


        a Porsche my ass.LOL

      • Thomasg0102 September 21, 2011 / 4:20 pm


        don’t be jealous. it’s a fact that German and European cars are better than the American counterparts.

        Believe what you want about someone’s personality. It’s all just projection anyway.

        You’re a fake marine wannabe like Neo whose best days are behind him.

      • neocon1 September 21, 2011 / 4:21 pm


        the GOP does have a monopoly on religious kooks

        does that mean the donks have a monopoly on sodomite, atheist, marxist, leftist, KKK, muslim kooks?

        finally we agree……

      • neocon1 September 21, 2011 / 4:23 pm


        fake? no
        better days? yup
        still better than you ever was or will be? yup

      • neocon1 September 21, 2011 / 4:32 pm


        a fake german with a huffy is more like it.

      • Cluster September 21, 2011 / 4:33 pm


        dbschmidt is spot on. I think you are the only poster ever to reveal what kind of car you drive, as if that has any import whatsoever. You are a classic narcissist, with delusions of self grandeur. I also am humored by your many references to age.

      • turnabout September 24, 2011 / 11:09 am

        Thomas, just curious—is that “Porsche” also inflatable?

  3. bardolf September 21, 2011 / 4:10 pm

    Rush L. mentioned an article by Douglas Rushkoff on CNN questioning most of the premises of the modern economy


    The question is whether, with technology, there really is enough “real” work needed to be done by people nowadays. Imagine everyone was content to live on average in a house the size of their parents, eat a healthy amount of home cooked meals, not buy all kinds of junk from the dollar store they don’t need … That would require only a fraction of the needed people.

    • neocon1 September 21, 2011 / 4:17 pm


      well if we built more nuclear power plants, refineries, drilled, produced 70% of our domestic steel, built 85% of our automobiles domestic,and trucks,
      that might be a good start.
      Dont forget the beeeeer, busch is now foreign as are 90%

    • neocon1 September 21, 2011 / 4:18 pm


      plus build the fence deport 30 million ILLEGALS including barry things would turn around fast.

      • neocon1 September 21, 2011 / 4:24 pm

        all children go with their parents….to der fatherland

      • neocon1 September 21, 2011 / 4:27 pm


        nazi.com…ie. theblaze.

        nazis, commies, KKK all leftist all donks..that leaves the blaze out.
        stay with AL-jezerra your style.

      • dbschmidt September 21, 2011 / 5:51 pm

        You do realize that “all” illegals have been deported twice before in this country’s history?

  4. js September 21, 2011 / 4:19 pm

    the price of houses need to drop dramatically to fix the problem…banks are the new owners of these homes…that real estate and mortgage brokers produced assessments that drove the values of housing up up up over 2 decades…now…it must come down down down…to reality….those homes that sold for 75k back 20-30 years ago…are not worth 200k…the probably are not worth 75k anymore…old run down and empty….

    the market rose on fautly prices…the price fixing pushed building frenzy…bankers pushed faulty morgages…the losers were the people that they fixed up and let move into the homes…that were lied to…the poor that would not be able to afford the payments…

    nothing is done about the victims…they bailed out the predators and are trying to fool us with those crocadile tears…the poor, rich banks dont want to lose the paper fiction money empires that they desparately grasp as the titanic slowly sinks beneath the waves…no…filling those houses with more victims will not cure this problem…the prices have to fall…poetic justice strikes its chords…the poor can finally afford to buy a home…the price has got to fall..

    we should see 3.5% interest rates soon…mortgages are the only way to solve this housing crisis…little or no money down…just move in and make the payments…

    • neocon1 September 21, 2011 / 4:30 pm

      Hmmmm amnesia tommyturban……….

      • js September 21, 2011 / 5:26 pm

        the biggest insult to all of this is that all the mortgages…all those trillions in money came from the Federal Reserve…it was all TAX DOLLARS…none of these banks had enough to cover these loans…they didnt use depositors money…they used the credit of the United States to guarantee that money…which depreciated every penny every one of us had…it was all tax dollars…and now..those same banks…are grasping to insure that they dont lose value…

        let them fail…the first step to cure this problem…is to admit that there is a problem…and nature will take care of the rest…and restore our economy…

        but if we play this lie…we lose…dump the socialists and dump the federal reserve…force congress to do the job that the United States Constitution assigned it to do and to insure that the value of our currency does not fall any more than it has

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