Here’s Why Housing Markets With Booming Prices Haven’t Fully Recovered: Construction
Sellers have been responsive to shifts in supply conditions, mortgage quality is solid, and arrears rates are low and edging lower. Slowing home sales should in turn lead to a reduction in new home construction. We expect starts will fall to about 170,000 units in 2014, below demographic replacement demand. A period of below-average construction will help absorb excess housing stock. Unsold inventory has been creeping up in recent years with starts exceeding household formation trends, but is not particularly high from a historical perspective.
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Metro housing market depends on strong resource economy
As a result of the trickle-down benefits of provincial resource development to local economic growth, cities develop a capacity to become more socially and environmentally sustainable. It is because Metro Vancouver cities greatly benefit from a resource-based provincial economy that they can afford to institute world-leading environmental and social development strategies. It is because of primary industry, that the region has a strong housing industry but also ultimately strong tourism and film sectors. [link] Investments in education, public health, social housing, public transit, green building and environmental conservation all require a funding source. That ultimate funding source in B.C.
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Nine more — including five more in California — have had price gains of 20 percent or more. Price rebounds are helping normalize the housing market: rising prices lift borrowers back above water, and price appreciation will encourage more homeowners to sell — which has already started to bring more inventory onto the market. Do these huge price rebounds mean these markets are back to “normal?” Hardly. Many of these rebounding markets are still hung over from the excesses of the bubble, with lots of vacant homes thanks to overbuilding during the bubble and slow household formation since the bubble burst.
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