After the Smoke Clears: What’s Next for the Housing Market?

According to an article by Jonathan Lansner in yesterday’s OC Register (Can fires rekindle slumping housing industry?), some analysts agree with Julie (Loss from Fire… the aftermath?) and Brian (Past Sales for Huntington Beach) concerning the possibility of the fires causing an upswing in the real estate industry. The analysts’ conclusion: Not likely.

As economist Chris Thornberg of Beacon Economics said:
“Permits are down about 100,000 per year right now and still falling. The next five years will see half a million fewer units built than the last 5 years. 1,500 rebuilds? Drop it the bucket.”

Ryan Kelly, bond trader at Spectrum Management, put it even more succinctly, and more harshly:
“Not much. Not enough burnt houses.”

Ouch! But probably true.

Note: See “Fires out, California housing still burns” by James Saft, for a dismal prediction concerning the California housing market and economy.

PHOTO COURTESY DRB62

“I fear we shall outsleep the coming morn, as much as we this night have overwatched.”
— William Shakespeare, Midsummer Night’s Dream

This is the caption that the photographer included with this photo of the recent fires. It just might apply to the current housing situation: too much attention paid to what was expected to be a never ending climb in housing prices, but now the payment for unrealistic expectations must be paid.