Homebuilders will keep building taking the economy into long term recession – Miami condo builders lead the way
Peter Oberois
Jul. 20, 2007

Home builders across the country are operating based on massive infrastructures, Wall Street exposure and expectations. New home construction companies are taking the approach of the car manufacturing companies. Their approach is to build better and more sophisticated homes and somehow get enough incentive and other financial stimulus to get a family in.

I bet that you heard many times before – ‘Oh that car salesman … He got me into this costly car, and I am stuck with this payment for five years!’

Now you are hearing ‘I bought the new home from the builder and now we are stuck in here somehow paying the mortgage with little money left for clothes and recreational needs.’

The builders will continue to build new homes. The prices will fall and that will drag the price of existing homes down.

The net effect is a long-term recession that will eventually turn into a depression.

Take the example of Miami condo builders. In the middle of the biggest glut of condominiums in more than 30 years, Miami developers keep on building.

According to some analysts, the oversupply will force prices down as much as 30 percent, the worst decline since the 1970s, and help push Florida's economy into recession as early as October.

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