http://www.bizzyblog.com/2007/08/17/couldnt-help-but-notice-081707/ The Business End of the Blogosphere Thu, 04 Dec 2008 04:25:48 +0000 http://wordpress.org/?v=2.5 http://www.bizzyblog.com/2007/08/17/couldnt-help-but-notice-081707/#comment-116361 TBlumer Sat, 18 Aug 2007 02:16:27 +0000 http://www.bizzyblog.com/2007/08/17/couldnt-help-but-notice-081707/#comment-116361 Valid point, Mr. Scott. I'm surprised there wasn't more overbuilding, but the big firms have gotten much better (obviously not perfect) at ramping up and down. That partially explains why prices haven't fallen nationwide. Valid point, Mr. Scott. I’m surprised there wasn’t more overbuilding, but the big firms have gotten much better (obviously not perfect) at ramping up and down. That partially explains why prices haven’t fallen nationwide.

]]> http://www.bizzyblog.com/2007/08/17/couldnt-help-but-notice-081707/#comment-116357 dscott Fri, 17 Aug 2007 20:13:20 +0000 http://www.bizzyblog.com/2007/08/17/couldnt-help-but-notice-081707/#comment-116357 I'd like to make a comment on the economy, especially the housing market. Did it not occur to people when builders so easily could get construction labor (illegals) that they in effect helped create an artificial glut in the market for homes? Had the home builders been forced to make due with domestic construction labor, less homes would have been built, reducing the excess housing inventory and therefore more existing houses would have been able to be sold. This would have provided a sustainable price for housing and thus lenders would not be in the situation of home values dropping below the mortgage amount (negative equity). In effect, the housing bubble in specifically in Florida, where I live, was due primarily to over building and speculators buying up homes for resale/flipping. Overpriced housing is normally corrected by market forces, however, when you have builders quickly empty the pipeline of planned housing units, you have a receipe for a sharp slump in construction. Bottlenecks do serve a useful purpose, in this case, the builders would have been able to avoid the boom bust cycle just by allowing their backlog in the pipeline to stack up thus keeping construction workers busy without laying them off. It's called cutting off overtime. I’d like to make a comment on the economy, especially the housing market. Did it not occur to people when builders so easily could get construction labor (illegals) that they in effect helped create an artificial glut in the market for homes? Had the home builders been forced to make due with domestic construction labor, less homes would have been built, reducing the excess housing inventory and therefore more existing houses would have been able to be sold. This would have provided a sustainable price for housing and thus lenders would not be in the situation of home values dropping below the mortgage amount (negative equity). In effect, the housing bubble in specifically in Florida, where I live, was due primarily to over building and speculators buying up homes for resale/flipping. Overpriced housing is normally corrected by market forces, however, when you have builders quickly empty the pipeline of planned housing units, you have a receipe for a sharp slump in construction. Bottlenecks do serve a useful purpose, in this case, the builders would have been able to avoid the boom bust cycle just by allowing their backlog in the pipeline to stack up thus keeping construction workers busy without laying them off. It’s called cutting off overtime.

]]>