Lower housing starts is a great thing

The national news this morning that housing starts are down 10.2% is great – from a long-term. If demand is moderating, then adding to existing inventory is foolish. Builders are suffering, but the wider housing economy will benefit by this reduction in adding inventory.

The market needs to work its way through the excess inventory. Not adding to that pile is a good start. In the Charlottesville region, there are nearly nine months of inventory –

Charlottesville area housing inventory

I’m looking forward to Albemarle’s 3rd Quarter building permit report. In the meantime – this is a good discussion at cvillenews last month debating such growth issues.

Pay less attention to the breathless analysts and read cogent, clear analysis from people like Noah and Pat.

CR says:

Even with the declines in permits and starts, this report shows builders are still starting too many projects. Starts will probably continue to decline in coming months.

Finally, you’ve gotta love the Economist.

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