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 JAN. 02, 2007
Hot and Cold Spots in the Real Estate Market
Even though new home construction rebounded in November, the numbers are still beneath the boom that was seen over much of the past 10 years. November's numbers came in as the 2nd lowest figures in the past 5 years - only behind the October, 2006 figures.


Large amounts of existing inventories are the main contributing factor that is keeping housing starts lower than previous years.

Dean Baker, who is Co-Director of the Center for Economic and Policy and Research states that the market in general is trending downward. He has long-maintained that the run-up in home prices in the recent past has been the reason for the housing bubble. He continues by commenting on the oversupply of new homes that builders have to sell off. Additionally, the number of vacant homes is at a record high.

A chief economist for the Northern Trust, Paul Kasriel, states that housing starts were down 27.8% in the month of November from 2005. this is the largest decline over a previous year since a 32% decrease was reported in March of 1991.

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