Housing construction was down 6% in August. Inventories of unsold homes are at record highs in many markets.
Both buyers and sellers are on strike.
At some point both will break. Buyers won't be able to resist bargains, and sellers will get tired of just sitting there. They'll take what they can get.
Our strategy when we sold our townhouse last spring was to price high when we listed. We started at $359k. After a few weeks we went to $345k. Then we dropped to $335. I was just getting ready to drop the price to $320k when we were offered $310k, up from the $297k we paid 30 months earlier. We took the offer, because in this market, if you don't close the deal, the buyer may find something better and walk. I wanted out of the deal, and I was sure the market was quickly weakening. That was in May. The market's softened considerably since them, and I'm happy to have done as well as we did.
Sellers who hold out for "their price" in this market may find themselves selling for a lot less in a few months.
Buyers with the discipline to wait for sellers to give up will find some wonderful bargains over the next 12 to 18 months, I'm thinking.
Today, the AP reported: "WASHINGTON - Housing construction plunged in August, falling to the lowest level in more than three years as the once-booming industry showed further signs of a dramatic slowdown.
The Commerce Department reported Tuesday that construction of new homes and apartments fell by 6 percent, the third consecutive decline and a much bigger setback than analysts had been forecasting."
