Worst Housing Market Is In?
April 9, 2012 § Leave a comment
New data out of Standard & Poor’s this morning painted a somewhat mixed picture of the U.S. housing market: showing home prices may have hit bottom.
via Business Insider.
Hit bottom? Unlikely. But what I really wanted to show what this chart:
Looking at the worst performing cities: Atlanta, Las Vegas, Chicago.
In January 2011, I wrote:
Further, when a developer gets a piece of land, financing, or other services from the TIF it lowers the developer’s costs. This causes an interesting thing to happen. This developer has a competitive advantage over a developer who has to buy land or services at market rate. Therefore, this developer can sell units either cheaper or at a higher margin than the developer without the TIF. This interferes with the market forces, causing more units to be built in TIF districts than would otherwise by market forces alone. This over-development has caused Chicago’s housing market to be overly sensitive to the nationwide collapse in real estate. In Chicago we have overbuild so many housing units that we have damaged not only the home owners market but also the rental market. Thousands of condos build to be owner occupied are now rentals. Standard rental apartments are going unfilled because of the cheap flood of rental condos.
I believe I was right then… and right now.