|"Perhaps consumers and lenders learned their lesson in 2008. And perhaps that lesson was: donít overspend and donít overextend or it all falls down." .... But I donít see this cooling as an indication of danger. I see it as an indication of a smarter consumer.|
A smarter consumer? Bidding wars of 60, 80, 100k over asking price? Because they have to have That house? Were they smart when they paid double what a house is worth, or did they just happen to get smart when inventory evaporated? The lessen of overspending in 2008 was never learned and in fact has gotten worse.
The shortage of inventory existed long before any supply chain shortage. Demand for housing and willingness to pay exceedingly more than market value has created a feeding frenzy with the negative consequence of hyper-inflation. The rising cost of everything from land to building permits and now materials has stalled new construction. It didn't increase the intelligence of buyers.
It's hard to blame consumers looking to buy a home, but at what cost? When do we say enough is enough? At what point does one stop over-extending their credit and blowing through emergency savings (if they have any) and start doing without or with less?
For once some truth being reported:
"Builders cited the high costs for land, labor, materials and government fees, as well as tariffs on myriad building products and appliances. Over the last year, they said, the potential profit on many new projects has shrunk to the point at which it doesnít make sense for builders or their financiers to take the risk."
Every other house in my neighborhood has a pick-up truck (or two) indicating construction related employment.