by Chas Bonner
THE HOUSING BUBBLE-BUST
One might wisely ask, “What is a blog about housing doing in an agricultural medium?”
First, every farmer lives in a house, and second, every person in the country knows what housing has done to our economy as well as to their own family economics.
But all is not doom. There have been some positive outlooks for months:
- The largest builders in the country are public companies, and because of heavy cost cutting, bond sales, government tax breaks, and asset sales, they are in sound financial shape. In fact, many have seen a doubling of stock price off the bottom.
- These builders have a reported $12 Billion cash, ready to invest.
- Building lots owned by these companies are actually on the increase. With a 60-80% decline in the number of homes built over the past 3 years, the demand for housing should increase dramatically when “Junior” finally finds a job, and moves out of his parent’s home.
- Many construction costs have dropped, though that will reverse if and when construction begins anew.
- Even the “Oracle of Omaha,” Warren Buffett believes the housing crisis should soon be behind us, and he is the owner of Clayton Homes. He should know.
Although we are still deep in the woods, at least we can see some light between the trees.
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