Housing Starts in the US

[Stan 101]

I had an interesting conversation recently with the national sales manager of US nail plate manufacturer. Nailplates are the little things that hold timber together for roof, floor and wall structures.
Sales have dropped 70% in Florida over the last 12 months. New equipment for the roof truss industry in the southern "sun" belt have also dropped considerably. Track housing on the west coast have also slowed in a significant way.

The lack of sales had been noticed before the whole "low doc" issue raised it's head in the US...It will be interesting to see the sales results for next couple of quarters.




Regards,

 

[krisbarry]

According to the channel 2 finance program within the nightly news service last night, US home building tradies could take the next 10 months off work. Talk about over supply of homes.

God I wish I lived in America right now.

Australia paints a very different story, severe under supply, and everyone has a view about how to fix it and who caused the problem. BUT no-one is owning up to the crisis, or taking responsibilty to fix it. Just plenty of buck-passing and hand-balling, and its not my problem, well it is....its everyones problem!

Even the tax payer who pays hard earned taxes to the system, then raises rents, which in turn raises the CPI, and when the CPI rises, then welfare payments rise and so does rent-assistance. Centrelink then pays out more benefits, thus leading to higher taxes to cover the higher welfare payments and so the merry goes round. The cycle begins again!

 

[tech/a]

Like everything in the US has to be BIG

When in Florida in 003 and having an interest in housing,I noticed how they do things.

One massive difference is a building Company ---and they are MASSIVE.
will have a whole subdivision of say 500 homes.
They will build ALL the homes at once then release the whole subdivision for sale.
You go virtually supermarket shopping for a house.
Most sold within weeks of completion.
Instant suburb.

Builders would start in 2002 with house prices at say $200K and sell in 2003 at $250K. Due to capital appreciation.

 

[dhukka]

Did anyone say Housing starts?

 

[wayneL]

Did anyone say Housing starts?

Nice trick they played last night... revise last months figures sharply downward so that this months look better. Do they think we are ^%$#ing stupid? (Well, I think many actually fell for it).

Hilariously, Bubblevision is calling the bottom in housing.

 

[Ken]

QUESTION?

how is this going to effect the following Australian companies in the next 3-5 years.

All this stocks are wel off there highs and probly fallen by 20-30%

Boral
James HArdie
CSR

Are they cheap at current prices or still more to fall??

 

[robots]

hello,

those companies are diversifing in the building materials sector, at least in the AUS market, not sure in the US market

buying smaller private companies which may integrate well

for instance CSR's purchase of a couple of glass companies to integrate into "energy efficient" products category

boral making "different" type of retaining wall sysytem's, blocks etc

thankyou

robots

 

[dhukka]

Nice trick they played last night... revise last months figures sharply downward so that this months look better. Do they think we are ^%$#ing stupid? (Well, I think many actually fell for it).

Hilariously, Bubblevision is calling the bottom in housing.

Not only was August revised down but June and July were also revised down substantially. That essentially covers the whole summer season. September will almost certainly be revised lower and remember New Home Sales don't take into account cancellations which are at record highs.

Not to mention that the standard error is + 10%. It's all here if interested

 

[wayneL]

QUESTION?

how is this going to effect the following Australian companies in the next 3-5 years.

All this stocks are wel off there highs and probly fallen by 20-30%

Boral
James HArdie
CSR

Are they cheap at current prices or still more to fall??

Overseas property markets are looking absolutely dreadful... and it has only just started.

Over the next 3-5 years a lot of things may or may not play out.

*Credit crunch phase II leading to a longer term contraction in credit.
*Recession
*Peak Oil (which will severely affect car dependent suburbia)

We have just completed a massive credit expansion/real estate/building bubble which may be in for a hard landing.

IMO there is a way to go before this downside plays out.

****with all the usual disclaimers, etc.

 

[KIWIKARLOS]

that graph of housing starts , completions and recessions is not indicative of anything. Never before has the housing industry caused a recession its always been the recession causing the downturn in housing construction.

This is a whole new ball game now.

 

[CanOz]

That is just an awesome chart Dhukka. Can you pm that to me? I think i'll put it up in my office for all the stupid capitalist pigs that wander in now and then to argue about the economy with me.

I wonder what would have happened if after Sept.11th, the US just let the markets lead the recovery instead of interferring so much?

Cheers,

 

[Ken]

does anyone have figures on population forecast for the year 2010+ 2020+ 2030+ is the population growing or decreasing?

surely they must be taken into the bigger pciture. The US is reported to have this housing slump. But really is this only due to the massive rise in house prices over the last 10 years? Isn't this just a normal correction like the stock market has?

If people are living longer world wide does the population increase. Houses will have to be built. If theres a 2% increase in population world wide in the next 15-20 years, houses are going to be built.

I am sceptical about the US housing market and the way its being reported. The media loves to pick something up and run with it. The figures are there, but is it really as scary as they are making out.

House prices cant keep going up. so maybe people have just over-payed for houses, cant afford to repay them, so they are selling. The market will aborb these houses over time you would think.


This will happen in australia one day, where houses keep going up, and people cant afford to make repayments.

 

[KIWIKARLOS]

also i would rather be in the oz situation now of having greater demand than supply in this environment. Also this stuff about peak oil been now is not true.

It may be peak oil for conventional crude but there is literally trillions of barrens of oil still in the ground by way of oil sands and oil shales. These have to be mined and require alot more processing but shell has said that if oil hits above $100 US then these supplys become economic, and once they start production and invest the capital the cost can feasably decrease to equivalent of <$50 per barrel.

Coincidently 90% of the worlds oil sands are located in Canada and Venezuala, Canada already ships about 800K barrels a day of this stuff to the US. There is enough hydrocarbons in the world to keep us going for hundreds of years. Not to mention the fact you can convert coal to diesel and the cost is about $100-120 per barrel equiv. Wyoming has enough coal for 50 years of diesel production and australia 100+

Check it out.

http://en.wikipedia.org/wiki/Oil_sands

 

[wayneL]

that graph of housing starts , completions and recessions is not indicative of anything. Never before has the housing industry caused a recession its always been the recession causing the downturn in housing construction.

This is a whole new ball game now.

That is merely a statement without any substantiating logic. More information to support your analysis please.

 

[KIWIKARLOS]

fact is housing downturn is a product of a recession not a cause like it is now thats why the US thinks it can weather this storm because housing has NEVER caused a recession before.

 

[KIWIKARLOS]

if you graphed any economic activity compared to the recessions in the last 50 years they would all co-incidently go down as well

 

[wayneL]

also i would rather be in the oz situation now of having greater demand than supply in this environment. Also this stuff about peak oil been now is not true.

It may be peak oil for conventional crude but there is literally trillions of barrens of oil still in the ground by way of oil sands and oil shales. These have to be mined and require alot more processing but shell has said that if oil hits above $100 US then these supplys become economic, and once they start production and invest the capital the cost can feasably decrease to equivalent of <$50 per barrel.

Coincidently 90% of the worlds oil sands are located in Canada and Venezuala, Canada already ships about 800K barrels a day of this stuff to the US. There is enough hydrocarbons in the world to keep us going for hundreds of years. Not to mention the fact you can convert coal to diesel and the cost is about $100-120 per barrel equiv. Wyoming has enough coal for 50 years of diesel production and australia 100+

Check it out.

http://en.wikipedia.org/wiki/Oil_sands

That's probably true. What we have is peak "easy to extract and refine" oil. The use of tar sands as the main supply etc will however, still lead to much higher prices.

 

[wayneL]

fact is housing downturn is a product of a recession not a cause like it is now thats why the US thinks it can weather this storm because housing has NEVER caused a recession before.

The economy has never been so dependent, indirectly and directly, on house price appreciation before either. As you say, a whole 'nuther bowl of wax.

 

[KIWIKARLOS]

agreed but even if oil was to be $200 dollars a barrel from using things like ta sands we could definitly inprove the efficiency of current vehicles by 50% with use of Hybrid technology and compostie materials, although the cars then would be more expensive to produce. Perhapes each family would have one car instead of one per person :

 

[wayneL]

agreed but even if oil was to be $200 dollars a barrel from using things like ta sands we could definitly inprove the efficiency of current vehicles by 50% with use of Hybrid technology and compostie materials, although the cars then would be more expensive to produce. Perhapes each family would have one car instead of one per person :

Agreed!

A lot of rationalizing can be done with regard to oil usage. It is criminal how much we waste at the moment.