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Scott Jagow: Demand for PC’s and TV’s is obviously lower. But demand for new homes?
It’s at the bottom of the ocean. The numbers out this morning wrap up the worst year for builders since at least 1959. More on that from Ashley Milne-Tyte.
Ashley Milne-Tyte: New housing stars sank by 15.5 percent. Applications for new building permits also fell to an all-time low.
Joel Naroff is president of Naroff Economic Advisors:
Joel Naroff: Well, looks like developers and builders have essentially given up trying to do anything in this market right now. There’s really no demand out there. They can’t cut their prices enough to match the foreclosure prices.
He says the level of foreclosures will stay high all year, helping to keep house prices down. But he says for all the cheap existing homes on the market, many buyers still want something brand new. He believes new home starts could hit bottom this quarter, and that construction will start creeping back up in the spring.
Naroff says as for the homes that are going up, since builders are looking to cut costs and buyers want to spend less, many homes are being built smaller.
In New York, I’m Ashley Milne-Tyte for Marketplace.
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