Chinese Drywall and Existing Home Sales
Yesterday’s report on surging sales of existing homes helped the markets continue their climb back towards pre-panic levels.
But I also noticed this story from the Las Vegas Sun on the filing of the first Chinese drywall suits in Nevada. (Complaints about the drywall have been made in 24 states.)
Full disclosure: I have represented homebuilders for two decades and will proudly continue to do so. They are extraordinary companies, provide wonderful homes, and carry great infrastructure burdens as the make housing available to growing American population.
There will be no sustained recovery until housing gets back on its feet, and the key indicator of the return to good health in the sector will be new housing starts.
What the industry doesn’t need is a wave of asbestos-like litigation triggered by plaitniffs’ lawyers looking to develop a new practice area. If President Obama wants to push for some legislation that will actually contribute to the recovery as opposed to hindering it via massive uncertainty and exploding deficits, he’d ask the Congress for a law that limits the drywall exposure and which caps the damages –and the lawyers’ fees– in all such disputes.