Home Builders still see no recovery

"From David Streitfeld at the NY Times: Builders of New Homes Seeing No Sign of Recovery

Builders and analysts say a long-term shift in behavior seems to be under way. Instead of wanting the biggest and the newest, even if it requires a long commute, buyers now demand something smaller, cheaper and, thanks to $4-a-gallon gas, as close to their jobs as possible. That often means buying a home out of foreclosure from a bank.

Four out of 10 sales of existing homes are foreclosures or otherwise distressed properties. Builders ... cannot compete despite chopping prices.

This has led to the "distressing gap" between new and existing home sales! Here is a repeat of the graph showing existing home sales (left axis) and new home sales (right axis). This graph starts in 1994, but the relationship has been fairly steady back to the '60s. Then along came the housing bubble and bust, and the "distressing gap" appeared (due mostly to distressed sales)..."

at http://www.calculatedriskblog.com/2011/04/home-builders-still-see-no-recovery.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29