I was out and about today and one of the gazillion errands I ran was to stop by a friend’s house to drop off some chairs.  As we were talking, I noticed the idle construction equipment over the tops of houses and it dawned on me that perhaps the construction of new homes has finally slowed down.

See those bulldozers and the other heavy machinery?  Just six months ago, they were running nonstop in this overgrown neighborhood.  It was kind of an eerie relief to see them sitting quiet. 

According to Bloomberg.com, we have the highest supply of homes since 1982 and a 50 percent cut is needed to balance the demand and return to a balanced market,

New homes also are being built. The annual pace of housing starts was 1.066 million in June, data compiled by the Commerce Department show.

That total, down 53 percent from the peak in 2006, may decline as much as 34 percent more before bottoming, Dotzour said. Housing starts may fall to as low as 700,000 before reaching their nadir, Dotzour said.

"There’s a lot of places in America that don’t need any homes being built right now,” Dotzour said. "If we have this final capitulation in the homebuilders next summer, that will be the beginning of the absorption process needed to soak up the excess supply, and that could be several years.”

If builders are catching on, maybe sellers should also consider staying put for a year or two to allow the market time to recover