I
have always said that “As housing goes so goes the economy” and cars should
have been added to this same phrase. Probably the last two products that we
manufacture!
Cars
you buy today include all of the bells and whistles we may not want, we will
probably never use, adds to the base price and maybe nice but not necessary.
This is the same with new homes.
This
illustration is self explanatory and the time span for this past recession is
not complete. As our country is being transformed, we can no longer rely on
historical comparisons to help guide us.
US share of the US
Car Market:
1955 100%
1965 90%
1975 85%
1985 75%
1995 65%
2005 52%
2010 45%
Housing
is always affected by national policies but not all local housing markets are
affected the same way. The last entrepreneurial island called “housing” is still
alive and thriving or is it?
Managing
the cost - price relationship has always been important but not so much during
the “bubble”. Now, the importance of returning to basics will become the mantra
for success in an ever changing regulatory environment.
If you had your choice, which
new home or car would you buy?
A small home with all of
the bells and whistles
OR
A home with space with
limited features
OR
A larger home with all
of the features and all the bells and whistles
Not a clear cut answer because of all the factors that influence our housing decisions. But for new homes builders, they have to make decisions well in advance of market shifts, interest rate changes and extenuating circumstances ....... i.e. government regulations.
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