Summary
“Residential construction may be bottoming,” said Steven Wood, President of Insight Economics LLC in Danville, California. However, Mr. Wood provided no basis for his opinion. In fact he moved on to "public" construction" in the next sentence. Making statements without supporting the opinion is rather misleading or purposely misleading.
Analysis
Mr. Wood made the statement “Residential construction may be bottoming,” and then followed with “Over the next several quarters, federal stimulus dollars may support public construction activity despite weak state and local government funding.” Obviously Mr. Wood interpeted "public construction" as "Residential Construction" or chose to leave the statement as a dangling participial as public or government construction certainly play grounds and schools are not residential construction.
Mr. Wood then goes on regarding Architects reporting diminishing income which is a result of a declining market maybe he should have used the words "on a free fall" It seems that Mr. Wood believes the stimulus package has a provision for residential construction or is he championing Mr. Oboma's stimulus package for parks, schools, playgrounds and more institutional or government construction as residential stimulus.
In the Lehigh Valley in Pennsylvania marketplace residential new home construction and sales are sinking deeper into a depression stage. The Lehigh Valley MLS report was just released and documents "New Construction" median price of $408,000 and the average sales price of $464,000. These facts rely on the sale of six (6) new home sales in a two county area for the month of May with a combined population of the Lehigh Valley of 630,865 residents. Home builders especially National Builders are operating with skeleton crews and begging for sales. Richmond American's Pennsylvania office is now a function of the Maryland Regional office and Pulte is trying to hard to enlist area realtors to sell their standing product but without buyer confidence even lookers are staying home mainly because they cannot sell their existing homes and are afraid of what the future may bring with Washington spending out of control, gas prices rising again due to speculation and more so the appraisal problems with comparable sales being for the most part short sales that do not support realistic home prices.
This situation exists in many communities in the USA and the bottom has yet to come as confidence diminishes and living cost accelerate with the possibility that Washington will pass more tax legislation to fund non-stimulus projects and to finance political agendas.
Mr. Wood needs a walk down main street to feel the pulse of "Residential Construction" before he believes residential construction may be bottoming which term means the bottom is close and we're on the way up. I've walked and talked to main street and we have a different opinion.
