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Chicago Real Estate Blog - Details |
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Chicago Area Home Builders Confidence Continues to be low
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Posted by: John S. Osga - 12/19/2007 10:53:50 AM
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Home builders surveyed in the Chicago area seem to be right on track with their national counterparts - putting their confidence in the home building market at 19.
What does 19 mean? Well, roughly 1 out of 5, or 20%, of home buliders surveyed feel confident about the single family home market. That number is at a 15 year low and has been so for 3 months.
Just for some perspective, that number was at an all-time high in June of 2007 at 72, or 72% of all home builders felt confident about the market. Those market conditions were not sustainable.
Most home builders are continuing to contruct housing in an over saturated market. Why? I guess it's not easy to stop. I do not think home builders could just sustain operations for 3 years and not lose money, let alone stay in business. Hopefully, what the home builders might be doing is building different types of properties.
For instance, I have seen around Chicago a definite increase in more affordable housing, prices somewhere around $200,000.00 for a condominium. Two years ago, everything was 'Luxury', larger than life, and so affordable with those teaser rates. Everything seem like it was $350,000.00 or more.
Today's home builder needs to start building what we can afford. Not everyone needs 4000 square feet. Nothing wrong with advertising 'This homes are affordable' to today's home buyer. At least then we can pay our mortgages and stop worrying about them.
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