2008: Worst Housing Production Year in Recorded History

• January 26th 2009

by Will Smith

Morningstar has posted a video interview with Eric Landry, associate director of industrials and homebuilding at the investment services company. While the topic of housing starts and construction statistics might cause your eyes to glaze over, this particular video is actually not (that) boring — if only because the discussion is so dramatically bleak. For those without the time to watch the seven-minute video, see the key quotes we’ve highlighted below.

Key quotes:

• “[In terms of new construction] 2008 will go in the books as the worst year ever. Until, that is, 2009 is put in the books.”

• “Total starts [in 2009] will probably be lucky to be more than 600,000 units, which is a very, very significant number in the fact that never before have numbers that small been recorded. It’s not even close.”

• “Traditionally, when [housing] starts fall to about a million units, that marks the bottom. It marked the bottom in ’82, ’91, the mid-seventies. Every single bottom has been marked by a million units of construction that year. This year in 2009 we’re looking for about 60 percent of that, [i]if[/i] we’re lucky. Could be even lower.”

• Is there any good news? “We’re going to have to fight through quite a bit of weakness over the next four, maybe six, eight quarters. Who knows. But on the other side there will be [pent-up] demand for housing.”

Landry also says that the national housing inventory number that will come out next week from the National Association of Realtors will be very telling. Root for the number to be under 4.2 million, which would indicate that the oversupply of housing is being sopped up by the market.

This article originally published at https://dc.urbanturf.com/articles/blog/2008_worst_housing_production_year_in_recorded_history/478.