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More evidence that the nation's home builders are immersed in their worst funk in a generation: Construction activity and industry confidence has retreated to levels not seen since the 1980s and early 1990s.
On Tuesday, the U.S. Commerce Department said single-family housing starts in July fell to a seasonally adjusted average of 641,000 units, the worst performance since January 1991.
Builders pulled 589,000 permits for single-family homes, down 5.2 percent from June. The 589,000 permits represented the lowest total since August 1982.
The industry also took a measure of itself and came away unimpressed. An August builder confidence survey dished out the lowest reading since the survey started in 1985.
The atmosphere was summed up by Robert Toll, head of luxury builder Toll Brothers, active in much of Florida. Customer traffic remains "dismal," he said, though it hasn't gotten worse this year. He compared his company's predicament to a man standing in a tar pit up to his nose with his feet propped on a ledge.
"We feel as though we've stabilized … but that sure doesn't make us feel comfortable," Toll said.
Tampa Bay area builders — recently lightened by the bankruptcy and liquidation of Smith Family Homes — are slowly selling off some of the nearly 3,000 new homes jamming the market.
Like builders nationwide, local builders hope the recently approved housing rescue package will stimulate sales. The law includes a $7,500 tax credit, available until July 2009, for first-time home buyers.
Local housing analysts don't expect builder supply and customer demand to reach balance until late 2009.
[Last modified: Aug 21, 2008 02:28 PM]
Comments on this article
by Tony
Aug 21, 2008 2:28 PM
I'm tired of the builders whining. They brought this on themselves now have to pay the price. They overbuilt now expect the government to bail them out...most are Republicans who reject welfare but now want welfare handouts if it benefits them. LOL
by Snoz
Aug 20, 2008 4:18 PM
I love the way the builders are advertising this tax credit as being only applicable to new home purchases, and then saying it's for first home buyers when interviewed by the news.
by Bob
Aug 20, 2008 1:09 PM
The price of greed and excess in the housing market!
Let the flippers pay the ultimate price of foreclosure or Bankrupcy!
by Jack
Aug 20, 2008 11:55 AM
Common sense says that a historic jump (i.e. 2003-2006) will be followed by a low. Builders didn't prepare for the low and assumed the peak would sustain itself...they must have skipped Economics 101.
by Sarah
Aug 20, 2008 11:53 AM
Don't be fooled: it's a $7,500 tax credit LOAN that you must repay to the federal government.
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