Homebuilder Confidence at 2 1/2 Year High Yet Still in the Gutter; Huckster Hype Returns to Las Vegas

. An additional 5,600 homes were repossessed by lenders in the first three months of this year and could soon be for sale.

Yet builders here are putting up 1,100 homes, and they are frantically buying lots for even more.

Brent Anderson, a marketing executive with another Southwest builder, Meritage Homes, said it bought 713 lots in stricken Arizona last year, and was on the verge of starting construction in a new Phoenix community called Lyon’s Gate.

“We’re building them because we’re selling them,” Mr. Anderson said. “Our customers wouldn’t care if there were 50 homes in an established neighborhood of 1980 or 1990 vintage, all foreclosed, empty and for sale at $10,000 less. They want new. And what are we going to do, let someone else build it?” Gospel of Second Chance

Richard Lee hypes the opportunity to get in on the next real estate boom. An opportunity for who?

Everyone wants they say. In a sea of empty houses, one year from now, those houses will no longer be new. Who would be able to sell them and at what price if they needed to move?

Even if prices have bottomed (in some areas that is likely true), the supply of existing homes will keep a lid on resale prices for a long time to come, possibly a decade.

There is no second housing boom coming, just local huckster hype scattered in an ocean of empty houses with more foreclosures coming every month.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
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