Housing permits drop to 14-year lows

The Commerce Department reported(.pdf) that housing starts were down 3.7 percent in November and permits for new construction fell 1.5 percent to new 14-year lows, once again dashing any hope that the most recent up-tick in housing starts was the beginning of a bottom for homebuilders.
You'd think that things can't get any worse from here, but there is still a huge overhang of unsold homes, lenders are justifiably more cautious these days, and who wants to buy one of those unsold homes when all you hear about is foreclosures and falling prices?

Yesterday's Housing Market Index from the National Association of Homebuilders remained at all-time lows for the third consecutive month. David Seiders, cheif economist for the trade group noted, "The momentum in the housing market still is downward. Housing starts, given the inventory overhang, probably won't turn up until maybe the third quarter of next year.''

Adding to the growing evidence that you can work at Harvard and still be a moron, Nicolas Retsinas, director of Harvard University's Joint Center for Housing Studies commented "The fundamental problem with housing is oversupply.''

No, the fundamental problem is that a speculative bubble just burst and now everyone is thinking rationally again - home prices are still too high, potential buyers realized home prices are still too high, lenders are now interested in the borrower actually paying back the home loan, and investors don't want to go near securitized debt.

Could someone aside from Robert Shiller and about a thousand people with blogs say this just once?