Barrons looks at the housing mess….and blows chunks…
WHAT’S TO BE DONE about America’s housing rot? The problem has defied solution, be it in record-low mortgage rates, government tax schemes or slashed pricing, in part because it keeps growing.
New housing starts already have been slashed to close to the slowest pace on record, an 11% drop in October to an annual rate of just over a half-million units. Yet, the inventory of available housing units continues to mount.
The number of homes on the market is readily apparent from all the brokers’ signs on your neighbors’ lawns. But that doesn’t tell the whole story.
The so-called shadow inventory of residential properties on the market jumped 10% in August, the most recent month for which data are available, to 2.1 million units, CoreLogic reported Monday. That’s roughly equal to the number of dreadful McMansions and condos with rotten Chinese drywall that builders were churning out annually at the peak of the boom. It’s also equal to about eight months’ of supply at the current pace of total sales.
http://online.barron…L_hpp_highlight
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