I agree that there is a shortage of affordable housing. I don’t think we are in violent disagreement here. It’s pretty clear that we are in a bubble. But… as I’ve said before, I’m not an economist… I’m just a dude with a username. These are only my opinions, and I confess that I am not confident that there will be a crash. I feel as though government intervention is at an all time high and politicians do not want a recession under their watch.
Oh. I am sorry. I didnt mean to mischaracterize your position. Can you post any article I can read that aligns with what you are saying? Any article. From anywhere?
So why are there so many homes for sale? Why are there any price reductions? In 2021-2022, you saw frequent price increases on listings. I can’t tell you the last time I saw a price increase, but reductions are pretty much the standard now.
the fundamentals are there. household creation has exceeded home production for a number of years creating a pent up demand and housing shortage. production declines during covid made it worse. that is documented in multiple links above showing a national shortage of housing units vs household creation. current acoe vs fdep lawsuit halting all permits with waters of the state is only going to increase the shortage of available homes as it delays the delivery of the finished lots ready to be built on.
City, if you simply Google housing bubble or crisis, you will find plenty of articles. I don’t think I need to post them here. Either you agree or disagree, but I don’t expect to convince you of anything. It’s clear what your position is, and it’s a valid one. I just happen to disagree with you, but it’s not as if I don’t understand where you are coming from. Your argument has merit.
So you mean to tell me that if the interest rates were high in 2020-2022, we still would have had a buying frenzy? It’s simply supply, and not due to the rates?
this is analogous to asking why people were still catching covid if the vaccine worked. micro vs macro. there will always be houses for sale, market is in a push between high prices, high interest rates, demand, supply. prices are leveling and demand is growing
What? Based on what info? You could be right, but my wife is a realtor and it’s DEAD right now. Her fellow agents are struggling.
the numbers tell you, if you read them, that the household creation rate exceeds the home building rate, and it has for a few years now, and that has created a shortage of available units while more demand builds up. same thing is happening in England.
In fairness.. 2022 saw fewer existing home sales than 2013 and we have 30M more people living here. If you average the home sales from 2020-2022 you get 5.5M homes sold. The 5 years prior to covid the average sales were 5.4M per year. But again, we have a lot more people living here. Not seeing a buying frenzy.
I just don’t believe that the housing supply dam just so happened to break at the exact time COVID-19 pandemic and its historically low interest rates fell upon us. What makes more sense… housing supply became low overnight, or the rates were low causing demand and prices to explode? Is there any data to show the difference in actual housing demand vs the supply? Our housing inventory is climbing fast, so how is it possibly that we have a supply shortage?
$2B+ worth of land waiting to be bought by a dozen national builders so they can build 20k homes in the next 5 years. those are just projects that we are working on. $1B+ worth of new road projects in two counties to support growth that is just local on my radar REIS, ULI, and other professional groups I belong to constantly monitor and report on housing shortages. many articles linked above. too many agents used to living fat with little to no effort during boom times struggling to find listings or sell in a buyer-seller even market right now. interest rates and high prices hurting seller, shortage of inventory, cost to build new hurting buyer.
Chart which I think indicates the current bubble very well. I understand that some may disagree. It correlates almost exactly with the historically low interest rates, which supports my argument.
no. civil engineer with major land development clients. Housing Gap Widens as More Families Confront Fewer Homes (investopedia.com) Demand for housing across the U.S. is growing faster than supply as the population expands and young adults leave their family homes. In the past decade, some 8.5 million single-family homes were completed, about half the 15.6 million new households that were formed, according to a Realtor.com analysis.1 Realtor.com, "Overall New Construction Slows in December, Single-family Starts Surge."
The US housing market is short 6.5 million homes | CNN Business The United States is not building enough homes to account for the number of people setting up their own households. As a result, there is a sizable shortage of new homes after more than a decade of under-building relative to population growth, according to a new analysis from Realtor.com released Wednesday. The gap between single-family home constructions and household formations grew to 6.5 million homes between 2012 and 2022. However, this figure overstates the housing shortage, since new multi-family homes offer options both to buyers and renters. If multi-family construction is included — which is predominantly rental units — this gap is cut to 2.3 million homes.
Low interest rates certainly played a big role in the drastic price increases, as did a massive increase in the money supply (which I don’t believe you’ve mentioned but is included in your chart). Neither of those affect the housing shortage though; it will price people out of the market but doesn’t affect the underlying demand.
Yes, I have mentioned the money supply indirectly with terms like “cheap money”. My premise is that there is no actual shortage… at least not compared to the pre-pandemic era, so I have to refute the last part of your statement. We did not have a sudden population explosion in 2020, but we did have historically low interest rates.
