bad news or Not?

Recent headlines tell us that new home sales and new home permits have reached almost record lows. Two major builders have consolidated into one and another builders parent company has filed for bankruptcy.
How can this be good news for the resale housing market?
In last months newsletter I had an article that gave the seven things that have to happen for a market recovery. A slow down in housing starts and major players in the new home market pulling out were two important ones,
Real estate prices are controlled by supply and demand just like everything else in our free market.
Resale home sellers could not compete with the oversupply of new homes and the huge price discounts that went with it.
While many factors have contributed to the housing slowdown this is one piece of the puzzle and individuals will soon not have to compete with this artificial surplus.