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View Full Version : Commodity bust leading to a sharper drop in housing prices?



blazespinnaker
10-14-06, 01:27 PM
It's interesting, recently there has been a big drop in lumber prices (partly due to a retraction in commodities prices, partly due to 15% tax being implemented).

If this stuff lowers the cost of material for building a house, and therefore the cost of building a house, then could this lead to a drop in housing in general?

One of the reason our houses have gone up in price was because the replacement cost went up. Our houses got more expensive because the houses themselves were more precious (not just the land).

As our houses become less valuable, we may find that this exacerbates the housing decline ... kind of a feedback cycle.

Dropping housing prices, slower economy, causing a drop in commodity prices, leading to cheaper houses, leading to an even slower economy ... etc.

jk
10-14-06, 02:36 PM
i think it's been mostly land, secondarily labor that drove up the cost of housing. how many "knock-downs" or "tear downs" have you heard about?