Commerce Department will report today (March 16) that new home starts fell about 5% in February to 563,000; the peak was 2.3 million in mid 2006 and the low was 288,000 last April.

Does this give some relief to the market for pre owned homes?  We think that’s unlikely because the overhang of more than 3 million existing homes on the market and the potential of another 5 million estimated to be in the late stages of delinquency.  This “shadow market” of overhanging inventory is likely to grow if (1) the Fed, as expected, announces scaling back of its program to buy mortgage backed securities and (2) the Administration lets it home buyer credit expire April 30.

So nationwide values are not likely to recover quickly.  In Texas, however, we are seeing a gradual return to price stability and, in Houston at least, some recovery.

What does it mean to you, Mr. or Ms. Homeowner?  It means that if you ever wanted to get your taxable value under control, 2010 is the year to protest to your Appraisal Review Board.  Waiting until 2011 may be too late.