Wednesday, September 17, 2008

What about old home construction?

This country's very solvency is being threatened and it all comes down to this subprime mortgage crap: Citizens who have bought more than they can afford using ballooning mortgages which were sold to them by conniving lenders. It all comes down to INSTANT GRATIFICATION. For the lender: another sale, another commission. For the buyer: a big house with a big yard, just like the ads say they deserve. The REAL cost is now being presented.

One of our biggest problems now is called investor fears. Investors get freaked out by pretty much anything these days, but that's because many markets have become so fickle. I mean the price of gas may jump $.20 on the report of someone sneezing in Arkansas. What makes investors happy or sad? Indicators. One of their favorite indicators of late is the rate of NEW HOME CONSTRUCTION.

What's up w/the rate of new home construction? What about old homes? What's it like where you live? Because where I live, there are a lot of old homes, and especially loft apartments, that are being renovated and purchased by home buyers. Those renovations require labor - much the same labor required to build a new home, although there's usually a lot less vinyl siding purchased, but I don't think the vinyl siding industry is the backbone of the US economy. Why don't investors latch on to something a little closer to the bone, like the rate of new primary mortgages assumed? Isn't that the number we're ultimately after here?

What do we care if some developer just erected 30 units? Isn't it only relevant if the units were sold? I mean if it's actually the act of construction itself that is supporting our economy, then perhaps this realignment is overdue, because that's not a sustainable path anyway. What happens when the whole country is paved over with subdivisions? No more new homes to build! They're all built! Time to start building out oceanic platforms? I can imagine the names now... Wavewood, Dolphinwood, Kelpwood, Jellyfishwood... Scallop Terrace, Plantation Reef, Tidehurst... we could just update the random subdivision/housing development/rest home name generator with some seafarin' speak.

Anyway, the question is why aren't old homes being sold to new families included in the list of economic health indicators? I believe there is a boom in old home renovation right now, including the aforementioned loft apartments... why no mention of that in the media? Is it because the sale of homes isn't really important, but the act of building them is?

Answers are welcome...

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