Homebuilders Have the Most Inventory Since May 2008, Big Discounts Coming
Speculative building, measured by started but unsold housing inventory, is at the highest level since May of 2008. t.co/VgkiA2sWJq
— Mike "Mish" Shedlock (@MishGEA) May 25, 2024
The echoes of 2008 are deafening as the housing market teeters on the edge of another crisis. New single-family homes for sale have skyrocketed to levels unseen since the notorious housing crash, and the numbers are climbing with no end in sight. The speculative building frenzy has reached its highest point since May 2008, marking what could be a catastrophic peak.
Homebuilders are now staring down an unprecedented inventory glut, a situation fraught with danger. This surge is not just a blip; it’s a glaring red flag. The sheer volume of unsold homes is staggering, signaling potential deep price cuts and a market that could be heading for a severe downturn. With speculative building at record highs, builders are caught in a vice grip of their own making, facing the daunting task of offloading massive amounts of inventory in a cooling market.
The implications are dire. Expect significant price reductions as builders scramble to clear their books. The market saturation could stall new construction projects, leading to a slowdown in the construction industry. The economic ripple effects could be profound, from job losses in construction to a decrease in consumer spending, all contributing to a potential recession.
The market is already showing signs of strain. We’ve seen homebuilders offering discounts, reminiscent of the post-2008 crash sales. Foreclosures could spike as homeowners find themselves trapped with underwater mortgages. If this trend worsens, we could be facing another housing market collapse with far-reaching consequences.
This crisis is brewing, and the housing market’s fate hangs in the balance. The question now is not if, but when, this house of cards will come crashing down.
Wow !! We finally hit the peak, heading down. Average is around 1 million per year after the recent low of 400k, overall balanced out. pic.twitter.com/LE6n1UgzyW
— Rob Chandler (@Rob66733000) May 25, 2024
The Austin, TX housing downturn keeps getting worse.
Inventory of homes for sale just surged +442% over the last two years. Up to almost 9,000 houses on the market.
That's the highest inventory level on record for April going back 7 years.
Prepare for more price declines in… pic.twitter.com/iUjqzHj640
— Nick Gerli (@nickgerli1) May 24, 2024