assume that this weeks housing numbers are simply that same old things...
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Most press reports scream out about the huge increase in new housing starts and sales.
Well, that is almost The Truth.
What DID increase, a LOT, was multi-unit starts.
Most press reports said that was for "condos".
Well, that as stupid, and wrong.
Most multi-unit starts and permits are for "apartments.
Due to the shortage of vacancies, and huge rent increases.
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What PE and CR do much better than almost everyone else is skip the hype
and try to show U.S. the truth about what is really going on.
After my suggestions to Bill@CR, not necessarily bcuz of them, he has split single units from multi-units for both permits and starts.
Bcuz multi-units are both very seasonal, very volitile and also much smaller than single units, they severely distort the single unit numbers.
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When, not if, you read Bill's comments, you will see that he believes that their not only is beginning to be, but will continue to be for a couple of years, huge increases in multi-unit starts.
However, he also believes that there was a huge overbuilding during the bubble.
Not consistent.
What we are now seeing is a huge number of people living in foreclosures who are not paying rent or their mortgage payments. Those homes are not "vacant", yet.
To assume that they will, when forced out, move into an "apartment", is misguided. Why? Bcuz someone will move INTO the same homes that they vacate. Not them, but down the street is the exact same home, renting and selling for a fraction of the price they would have been paying - if they were still paying.
To assume that is not where they will move is presumptuous, in the extreme.
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| Housing Units added to Stock (000s) | |||||||
|---|---|---|---|---|---|---|---|
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 (1st Half pace) | |
| 1 to 4 Units | 1,673.4 | 1,695.3 | 1,249.8 | 842.5 | 534.6 | 505.2 | 437.0 |
| 5+ Units | 258.0 | 284.2 | 253.0 | 277.2 | 259.8 | 146.5 | 119.0 |
| Manufactured Homes | 146.8 | 117.3 | 95.7 | 81.9 | 49.8 | 50 | 46 |
| Sub-Total | 2,078.2 | 2,096.8 | 1,598.5 | 1,201.6 | 844.2 | 701.7 | 602.0 |
| Scrappage | 200 | 200 | 200 | 200 | 150 | 150 | 150 |
| Total added to Stock | 1,878.2 | 1,896.8 | 1,398.5 | 1,001.6 | 694.2 | 551.7 | 452.0 |
The key points are:
1) there will be record low number of completions this year, and 2) that means a record low number of housing units added to the stock, and
3) that means the excess vacant inventory is declining.
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PE:
New Residential Construction Report: June
http://paper-money.blogspot.
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CR charts: Housing Starts increase
http://www.calculatedriskblog.
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Mutli-family Starts and Completions
http://www.calculatedriskblog.
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On Track for Record Low Housing Completions in 2011
http://www.calculatedriskblog.
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