I guess I was quoted today in an article for the Post Tribune on housing in Northwest Indiana. I will agree that the market in Porter County especially is down about 20% for new homes. I will agree that costs are up due to commodity pricing and government largess. But ... since I gave that interview over a month ago ... the market has picked up quite a bit for this time of year. Why? Frankly because mortgage interest rates have dipped back down in anticipation of rates going back down starting next spring. The cycle is completing its trough.
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My worry is that there are those pundits and bloggers who seem to be cheering for a housing bubble burst. Why? I can only guess that they would like to see the market drop so they can buy at the low point. There is no bubble, or bubble burst. This is merely the normal market reaction to interest rates, economic cycle, and government overextending itself at all levels.
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Home Builders have suffered the most, since REALTORs make money even if sellers are dropping prices. Builders are generallly sitting on too many specs. Why? Again I'll be frank, they need the construction activity to pay for their overhead. A little slowdown is actually good for the market since it encourages builders to drop overhead and move to more efficient trade partners. The most battered this winter will be trades since they got a free pass last winter when too many specs were built. Not this winter.
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