Maybe there will be no "correction" to housing market- U.S. housing market's underproduction crisis getting worse

[GON]

According to a study released on Thursday 14 JUL 2022, the U.S. homes deficit more than doubled between 2012 and 2019 from 1.65 million to 3.8 million.

In 2012, the nation’s affordability problem appeared to be concentrated on the coasts and in the Southwest. However, Up for Growth has identified a housing deficit in a total of 47 states and the District of Columbia as of 2019. The study found that the average U.S. state had a housing deficit of 79,000 homes in 2019.
California led the housing gap with a shortage of 980,000 homes, followed by Texas with 322,000 homes, Florida with 289,000 homes and New York with 234,000 homes.

Other states with severe housing underproduction in 2019 included Washington, New Jersey, Colorado, Arizona, Illinois, Georgia, Massachusetts, Virginia, Minnesota, Oregon and Utah. Six new states added to the underproduction list since 2012 include Mississippi, Missouri, Nevada, Oklahoma, Rhode Island and South Carolina.

Some of the article does not necessarily makes sense- like how is there a massive housing shortage in a state with ten consecutive years of population declines.

U.S. housing market's underproduction crisis getting worse, new analysis finds

A nonprofit focused on housing equity and home creation is calling for more houses to be built in areas with high economic mobility, access to jobs and existing infrastructure.

www.foxbusiness.com

 

[Pew]

Some of the article does not necessarily makes sense- like how is there a massive housing shortage in a state with ten consecutive years of population declines.

People moving out of the cities and dense urban areas to the suburbs, to get away from the issues, bad schools, bad neighborhoods, taxes, fines, and other riff-raff that many large Cities [Chicago] have slowly fallen into; compounded by the ever-so-present demand of more houses.

Did you live in Elmhurst, IL? If so, do you remember what Plainfield, IL was like in the early 90s when Route 59 was a dirt or 2-lane road? (that was before my time but I like to listen to the folks who've seen the changes here.) @wwillson may know as he lives not too far north of me. I swear I'm not calling you old!

 

[CKN]

Article confirms those waiting for a "bubble to burst" in many parts of the U.S. will be waiting a long time. There will be some adjustment in prices, but as long as demands exceeds supply we won't see a crash.

 

[dnewton3]

I've seen several similar news stories/reports which agree in principle with this one. Perhaps some of the numbers vay a little, but the general theme is that there's a large housing gap nationwide, overall, nor will it be solved anythime soon. The CVD labor and supply-chain topic didn't start this phenomenon by any means, though it may have entensified it recently.

 

[BMWTurboDzl]

I've been telling people this for years. For about a decade there has been a shortage in housing starts. Population declines can't make up for year-over-year shortages as it compounds upon itself. In fact population declines can be a sign of where those shortages are and at what income level.

 

[PF52]

I can't complain here.... We are super busy at work - our biggest clients are several of the big national homebuilders and they are gobbling up farmland, old golf courses, former industrial land, closed shopping centers and even less-prime land (like low-lying areas with poor drainage and marginal soil) and building houses there. I can't even remember a time we were less-busy.

 

[JoelB]

So is this housing shortage really a home builder shortage?

 

[CKN]

So is this housing shortage really a home builder shortage?

Office building in downtown Salt Lake City is being currently being constructed. The closed the adjacent streets around the site and poured 400 truck loads of cement in a couple of days recently.

Seems like building houses would be a walk in the park compared to a project like this.

 

[alarmguy]

There is an analysis for everything in America, means nothing at all. Its just a writer or a group looking for headlines in our demand for media news entertainment.

Maybe that sounds a bit harsh but the common sense side of things related to what I typed above is simple.
There is a shortage of everything in an American consumers life right now. Why? ummm ... we had a World Wide Health event take place.
Guess what? Businesses will catch up as the years move forward, not going to happened over night, in the meantime, we will be able to consume "gloom and doom" in the mass media.

 

[brianl703]

Did you live in Elmhurst, IL? If so, do you remember what Plainfield, IL was like in the early 90s when Route 59 was a dirt or 2-lane road?

The 1973 topographic map for Plainfield, IL shows IL-59 as a paved 2-lane primary highway.

EDIT: And the 1955 topo map shows it was once part of US-66.

 

[BMWTurboDzl]

So is this housing shortage really a home builder shortage?

Yes, at least in places where people want to live. Builders have stayed away from cheaper detached "starter homes" because land which is located within a reasonable commute time to employment centers is too expensive. Generally speaking new construction has consisted of luxury detached single family homes and townhomes/condos/apartments.

 

[PF52]

Did you live in Elmhurst, IL? If so, do you remember what Plainfield, IL was like in the early 90s when Route 59 was a dirt or 2-lane road? (that was before my time but I like to listen to the folks who've seen the changes here.) @wwillson may know as he lives not too far north of me. I swear I'm not calling you old!

Plainfield, yes, and south Naperville and probably another dozen or so areas which have filled in remarkably over the past 30 or more years. Lots of areas in Kane County too. If I could go back in time I would buy up some land so I could re-sell it to the developers at huge profits.

 

[97K15004WD]

Things seem to be slowing down around here. No new projects are being announced. Only the ones under construction are ongoing.

And time on market is increasing well over what it was three months ago.

 

[Pew]

The 1973 topographic map for Plainfield, IL shows IL-59 as a paved 2-lane primary highway.

EDIT: And the 1955 topo map shows it was once part of US-66.

You're right on for it being a paved 2-lane. I think the "dirt roads" part was some of the collectors. Well collectors now, probably local back then.

 

[PF52]

You're right on for it being a paved 2-lane. I think the "dirt roads" part was some of the collectors. Well collectors now, probably local back then.

Yeah, I think an unpaved Rt. 59 was probably way before our time.

I do remember Eola Road (which parallels 59) being gravel, from just south of Ogden all the way down to US 30. I used to use that as a shortcut between jobsites. That area is totally unrecognizable now; houses from end to end.

 

[PimTac]

The increase in mortgage rates is having a effect up here in the PNW. (Seattle). The market is slowing. Homes are starting to sell at list instead of higher offers. Price drops are happening.

In contrast, construction is slowing due to worker shortage and supply constraints. I am seeing projects busy for a few days then nothing going on for a few days.

Office building in downtown Salt Lake City is being currently being constructed. The closed the adjacent streets around the site and poured 400 truck loads of cement in a couple of days recently.

Seems like building houses would be a walk in the park compared to a project like this.

This would be a good example of what I just described. That 400 truck loads of concrete had to affect deliveries to other projects. Depending on the local labor market that effect may be wider in a geographical sense if they brought in drivers and trucks from outlying areas.

 

[IndyIan]

In tourist and growth areas, lots of housing units are becoming short term rentals, or simply investment tools with no renting at all.
The city of Vancouver has had an empty homes tax for a few years now. https://vancouver.ca/home-property-development/empty-homes-tax-frequently-asked-questions.aspx#:~:text=The Empty Homes Tax is,Homes Tax rate is 3%.

I see almost no custom homes built around me in the last few years that are "modestly" sized, everything is 3000+sqft on the ground floor complex footprint $6-7-800k+ but its mostly people moving from the city with lots of money from their house sale there, or just people with lots of money.
At current rental rates it kind of pencils out here for a modest duplex or triplex on municipal services though. I see a few are going up.
What's really taking off is adding an apartment to your house, people in our local city of 90k is adding ~300 of those a year with permits and probably more without.

 

[PF52]

This would be a good example of what I just described. That 400 truck loads of concrete had to affect deliveries to other projects. Depending on the local labor market that effect may be wider in a geographical sense if they brought in drivers and trucks from outlying areas.

I was wondering about that number too. Assuming 9 yards per load, 400 loads would be 3600 cubic yards of concrete. That's an awful lot for an office building.... Maybe it went to a bunch of different projects all in the same downtown area? 3600 yards is more like an airport runway-sized or giant bridge-sized pour. Maybe it was some sort of huge mat foundation that took up an entire block? In other words, it's not the norm.

 

[jhs914]

Things seem to be slowing down around here. No new projects are being announced. Only the ones under construction are ongoing.

And time on market is increasing well over what it was three months ago.

And you live where?

 

[ekrampitzjr]

That report goes only to 2019. We need more current figures. I'm hearing serious talk in parts of the country of housing demand slacking and sell prices dropping.

Everything I see being built my way is massive $400K+ McMansions. I wonder who really has the scratch to afford one of those. No one is building more economical housing, even though that's what we really need.

The big problem really is speculation in housing, fueled in part by the the 1997 tax code change for capital gains from selling primary dwellings. That's what has made everything unaffordable. I believe a house should be a place to live, not a means to make quick big bucks.