It's cynical but true. Bad housing news is always good for somebody. That's why the National Association of Realtors says there's no such thing as a bad market, but housing was made worse by overbuilding.

Many blame builders and their overeager response to non-occupying buyers like speculators and second home buyers for the housing crunch in places like Naples, Florida, and Las Vegas, Nevada. Unsold new houses and condos put pressure on older home sales, which impacts individual sellers.

New homes are hard enough for sellers to compete with, because they're, well, ...new.

That's why sellers should rejoice at the latest builders' news -- that housing starts for December dropped 38 percent from a year ago. Building permits (lowest since May 1993) and completions both dropped eight percent.

From 2006 to 2007, about 1,376,100 building permits were issued -- 25.3 drop below 2006 when 1,838,900 permits were issued.

Housing starts were also down nearly 25 percent.

Completions -- the equivalent to existing housing sales -- were 24.2 percent below 2006. About 1,500,200 housing units were completed in 2007, 24.2 percent below the 1,979,400 completed in 2006.

Before you go feeling sorry for the builders, look at it this way.

Builders are still overbuilding.

The National Association of Home Builders says that the sustainable, sellable number of new homes is about 1.8 million annually. We have a glut of new homes because builders have built above that level since 2003, and as late as 2006. Here are just four reasons why.

1. Like baseball players on steroids, housing has upsized 100 percent in the last 50 years, to break the square foot record in 2005.

2. Households are growing, but they're being driven by singles, not married couples with children requiring McMansions. In 2006, for the first time ever, single heads of households outnumbered marrieds.

3. Between 2004 and 2006, one-third of homebuyers were non-occupying.

4. Lack of affordability is preventing young people from launching out of their parents' basements. Household formation should be about 1.5 million a year, and we're at half that.

5. So not only are we over building, we're over building overpriced houses for the wrong buyers.

And that's just off the top of my head, folks.

The bottom line is builders will have to reduce inventories and prices much more before new and existing housing can turn around.

Published: January 18, 2008

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.