Home construction jumps 10.5 pct in August

   The road to recovery in the real estate market will be slow and will take longer than most people expect but it's coming. According to a new AP article released today:

http://finance.yahoo.com/news/Home-construction-jumps-105-apf-4101143282.html?x=0&sec=topStories&pos=1&asset=&ccode=
"Home construction increased last month and applications for building permits also grew. The gains were driven mainly by apartment and condominium construction, not the much larger single-family homes sector.
   Construction of new homes and apartments rose 10.5 percent in August from a month earlier to a seasonally adjusted annual rate of 598,000, the Commerce Department said Tuesday. That's the highest level since April.
   Pulling the figures up was a 32 percent monthly increase in the condominium and apartment market, a small portion of the market. Single-family homes, which represented about 73 percent of the market in August, grew more than 4 percent."

   The news is encouraging but it also shows that there's more demand for apartments and multi-unit dwellings than homes which is indicative of the slow pace of sales for single-family houses. Do I still believe it will take about 20 years from boom to bust for the real estate market to regain its health? Yeah, pretty much. I'm a business cycle guy and there's always going to be booms and busts. Booms inevitably follow busts and so on and so forth.

   I liken the business cycle to the rhythm of nature - during the spring, there's new life exploding everywhere as seeds sprout and insects hatch. The summer is buzzing with activity as the insects pollinate the plants and new seeds are created by the plants. As the fall rolls around, the plants start dying and the insects lay their eggs for the next generation. That's the boom and bust of nature in three seasons or roughly nine months. The business cycle obviously runs its course a lot longer but the concept is the same.