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Letter to the editor

Housing gloom with a side of doom

By Times staff and wires
Published September 20, 2007

The drumbeat of dour news on the housing front picked up this week, from the doubling of foreclosures locally to sobering comparisons to the Great Depression. Some lowlights:

Economist's take
An economist who has long predicted the housing market bubble would deflate said the real estate downturn could spiral into "the most severe since the Great Depression" and could lead to a recession. Yale economist Robert Shiller, in testimony prepared for Wednesday's hearing of the Joint Economic Committee, said the loss of a boom mentality may bring a drop in consumer confidence that poses a "significant risk" of a recession within the next year.

New homes are down
August's national new home numbers show residential construction has hit a 12-year low. The U.S. Department of Commerce reported that annual housing starts and completed homes were down 19 percent year over year, at 1.33-million and 1.52-million, respectively. The government didn't have a breakdown for Florida. In the South, starts and closings fell about 15 percent. Florida builders have been downsizing as demand shrinks.

Problems could persist
An index that tracks developers' expectations of future home sales fell this month to equal its record low, signaling the housing market's weakness could persist into 2008. The National Association of Home Builders said Tuesday its housing market index, which tracks builders' perceptions of current market conditions and expectations for home sales over the next six months, fell two points to 20 in September, the seventh-straight monthly decline.

Pain close to home
Foreclosure filings in Pinellas, Pasco, Hillsborough and Hernando counties more than doubled from July to August, from 2,871 to 5,904, according to the firm RealtyTrac. Although most of the filings were notices for late payment that won't end in banks seizing homes, 770 properties were taken back by lenders locally in August, up from 266 in July. Florida registered the third-highest foreclosure rate, with one filing for every 243 households.

[Last modified September 19, 2007, 23:03:32]