There are common themes that drive the fundamental economics of real estate, they have often been boiled down to cliches. One of them is that real estate markets are local. Certain markets were over built and I agree that it may take years or decades before the glut is eliminated. However, that will not be true in all markets, and on a macro level major demographic trends can not be ignored.
If you recall Silicon Valley was hit pretty hard after the Dot Com bubble burst, then one top of that they got caught in the real estate market bust. I looked recently at their inventory trends, here is a graphic:
Quote:
Our days of inventory indicator for single-family homes continued downward on the increase in sales, shedding 7 days, sending the indicator to 298 days. The indicator for condos fell ten days to 291.
http://rereport.com/scc/csper/
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I am not saying everything every where is going to be roses but if you look at many markets you will see positive signs and I just want to know when there has been a general market reversal. I think evidence is going to start showing that on a macro level, although year over year results will continue to look bad.
In the past it was rare to have a "national builder", in the past builders were local now "national builders" dominate. I think we are seeing a major weakness in the "national builder" business model. I think that weakness has lead to significant over building. The question is - will these "national builders" adapt or will they go out of business. I personally don't care either way, the point is - real estate markets are local.