October 12, 2007

WHICH IS WHY HOUSING PRICES MAY CORRECT, BUT CAN'T FALL:

At least 95,000 new homes needed each year - just for migrants (JAMES SLACK, 13th October 2007, Daily Mail)

At least 95,000 houses will have to be built every year until 2020 to cope with the record influx of immigrants - an increase of 30 per cent on the latest Government estimate.

The official research by the House of Commons Library is the equivalent of 260 new homes every day.

It follows an admission by Whitehall statisticians that they have badly underestimated the number of migrants pouring into the country.

Posted by Orrin Judd at October 12, 2007 9:50 PM
Comments

In the long run, there is pent-up demand for housing that will help keep a floor on how far prices can fall. However, in the short run, prices can still fall further because there is a nine-month supply of unsold homes that are already built.

This is like any other market when supply and demand get out of whack. Long-term fundamentals eventually will bear out, but that may take several years.

www.fundmasteryblog.com

Posted by: Kurt Brouwer at October 13, 2007 1:07 PM
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