CNN Money asks: Is a housing shortage coming? (Short answer: No.)
As the nation struggles to shrug off the worst housing crash since the Great Depression, it may be hard to believe a housing shortage could be on its way.
The nation is simply not building enough homes to keep up with potential demand. Just 672,000 new homes were started in April, less than half the long-term run rate needed to meet the nation’s natural population growth.
…
It’s the more constrained markets, where it’s particularly hard to build — such as New York, San Francisco and Seattle — that will field the bulk of the new bubble problems, according to [Director of Harvard’s Joint Center for Housing Studies Nicolas] Retsinas.
We have discussed this nonsense here in the Seattle market extensively over the last few years. Our latest look at the data suggested a local housing oversupply of 36,000 housing units.
Although it has been quite a while since we updated our collaborative stalled developments map, I still see many hundreds of plots ready to be developed whenever local homebuilders perceive that there is a demand for them, and in fact building at a few of these developments has even resumed in recent months (albeit at a very slow pace).
Meanwhile, Zillow’s Stan Humphries checks in with a dose of reality: Four Myths of the Housing Market
- The housing recession is over
- We’ll see a return to historical appreciation rates after we hit a bottom in prices
- The worst of the foreclosure crisis is over
- The homebuyer tax credits saved our bacon
The thing I love about Zillow is that since they’re not actually in the business of selling houses, they tell it like it is.
The housing bottom is likely to be long and flat, and it is highly likely that we will not return to historical appreciation rates for another three to five years.
…
The rate of foreclosures is actually INCREASING nationally.
…
The homebuyer tax credits did stimulate sales, especially during the first wave of the credit in 2009 when it was exclusive to first-time homebuyers. … In its second incarnation, however, most stimulated demand was likely pulled forward from future months versus being incremental new sales that would not have occurred otherwise.
So let’s see, who should we believe? The “news” website that bolstered the nonsense claim in 2006 that skyrocketing home prices around Seattle were “not outstripping the economic fundamentals,” and continued to boost those mythical “positive fundamentals” even into June 2007, or the guy whose job is to analyze and understand housing data, and whose entire company is built around collecting and processing as much housing data as they can?
Tough call.