Housing Market Slowdown

As I wrote in my previous post, rental housing is tight because people can't afford to buy.  The pundits are finally waking up to the fact that the housing market is slowing down and so the merry-go-round is about to stop again.  As a preliminary note, the only reason the housing market has been increasing is because a lot of hot, commercial money has been jumping in to snap up tons of houses for potential rentals or tear-down redevelopment; owner-occupied housing, which creates the community stability and social benefits we traditionally look for from this market, has not been making the difference.

The pundits talk about rising prices and rising interest rates forcing people out of the market, but they are ignoring, perhaps deliberately, the elephant in the room.  Too many people lack the economic stability to make such a long-term purchase.  Their income hasn't been steady for the last several years (if ever), they don't know how steady it will be over the next five years (It probably won't be.), and they don't even know if they'll be here for the next five years (probably not).  People can't buy, and even if they can, they don't have a good reason to.

Recovery?

For the last couple of days, the headlines have screamed that housing starts are up nationwide (Not here in Utah though. See my 15 May entry "Owee!".). You would think that means things are turning around, but headlines a great deceivers. If you actually read the articles, you find that single-family is still slumping. It's multi-family that's showing gains. In other words, investors and developers are betting that a substantial chunk of the population has now been squeezed back out of the single-family market and will remain out for a long time. If that looks like recovery to you....