New York Times has housing all wrong

Danielle Babb writes Monday on a real estate blog on the Enterpreneur magazine web site that the New York Times’ Floyd Norris has the real estate market pegged incorrectly when he writes that it will cause a recession.

Babb wrote, “At first glance, his logic appears to make sense. However, he ignores some of his own points that – in and of themselves, in my opinion – create a different answer to the question: Will the housing problems lead to a recession?

“First, he cites that builders are building at a level half of what they were two years ago. Precisely – when supply and demand work as they should, recessions can be held off.

“Second, he cites that if we don’t have a recession due to housing, it will be the first time in history that a housing slowdown hasn’t resulted in a recession. Exactly. This will be the first time in history. Why? The very nature of this ‘housing bubble’ is unlike anything we’ve ever had in history. I’ll explain more in my final paragraph.

“Third, he notes charts – one of which shows that housing starts declined with the mortgage crisis. And? I’m not sure when this revelation hit Norris, but that is one factor in the current housing crisis, and it means that we, as a nation, got a double housing whammy. It doesn’t mean market conditions won’t prevail.”

Read more here.