The coming housing calamity

[marmar]

The coming housing calamity
The great senior sell-off, rising household sizes, dropping homeownership, tighter lending standards, and other reasons why the next decade will be a disaster for homebuilders

Robert Steuteville, New Urban Network


The building industry is in deep depression, with housing starts at their lowest levels since data have been kept during the past half-century. Pulte Homes, one of the nation’s largest builders, reported losses of more than a billion dollars for 2010. Signs of a turnaround for the industry, one of the primary engines of growth for the US economy for two or three generations, have been sought since 2009 but are always over the horizon.

Arthur C. Nelson, one of the nation’s most prescient housing market researchers, says the worst is yet to come. The industry faces demographic and economic forces that will apply unrelenting downward pressure on the market for the next decade, Nelson told a group of journalists at the Forum on Land and the Built Environment in Cambridge, Massachusetts, jointly sponsored by the Lincoln Institute of Land Policy, the Harvard Graduate School of Design, and the Nieman Foundation for Journalism at Harvard University. He called his presentation “The Decade of Calamity.”

Nelson, professor of city and regional planning at the University of Utah, reported prior to the housing crash that the US faced a massive oversupply of large-lot single family houses and an undersupply of multifamily units — and he warned that Fannie Mae and Freddie Mac would confront deep troubles. All of these views have held up — one reason why Nelson has credibility now. The other reason is that Nelson’s views are based on solid research — some presented for the first time at the symposium in mid-April. ...................(more)

The complete piece is at: http://newurbannetwork.com/news-opinion/blogs/robert-steuteville/14620/coming-housing-calamity

[Drale]

1. The problem I have always seen with the housing industry

is that when you put everyone into a home, where do they go from there?

[KansDem]

2. With boomers retiring and relying on their "home investment" for a nestegg...

...who the hell is going to buy their homes?

With unemployment at records highs for who-knows-how-long, and emerging low-paying jobs, who's going to have the money to buy a retiree's home? I foresee a time in the not-too-distant future when we'll have more homes for sale than buyers. Then watch what happens to the economy!

It just doesn't make sense!

[eridani]

7. Wecould just live in them. Also consider housesharing for larger homes n/t

[Warpy]

8. Well, the idea isn't so much selling the place

as it is living in it and paying only taxes and upkeep. Likely we will be sharing, also.

Savvy builders can be kept busy with renovations, especially for handicapped seniors and extending space in small houses for growing families.

The housing that will be in trouble is the development in the exurbs if there is no rail transit to sustain it. Cars will simply become too expensive to use for 50+ mile commutes every day.

[exboyfil]

3. Simple solution multifamilies living in a single

house. It is already happening in Orange County. I know of two families living in my old house. Parking becomes a problem when you can have up to six cars to one house.

Definitely will be more multigenerational families in single houses. My plan, depending upon how my mom's health goes, is to retire in about 10 years, sell my house, and live with her so that I can take care of her. She has a 2 bedroom in Florida.

[xchrom]

4. recommend

[grasswire]

5. where is the trickle down?

When does this phenomenon of oversupply begin to help those who are under-housed?

What is propping up prices? The laws of supply and demand are being skewed by something, someone, somewhere.

[Chan790]

11. Bearer of bad news.

Never. It's an outcome that is actively avoided by virtually every municipality and state as key to maintaining quality of life and local economies.

When demand approaches nil, it is artificially-inflated by seizing abandoned or neglected property and razing it thus reducing housing stock and keeping housing prices high. The goal is to maintain a baseline for housing access. It's better for a city to tear down cheap housing than to let it become cheaper or completely negligible in value as low housing prices "attracts undesirables and increases crime." (which is a load of shit but that's the prevailing thought. It's class warfare meant to protect the rich by pitting the middle against the poor.)

[arikara]

6. This is what is weird here in Canada

Overall, sales have gone down a bit. In our area, some contractors leveled vast tracts of land or dug big holes and never did anything else. The town looks like a moonscape in some areas. Yet some have continued merrily banging up their chipboard $550,000 shacks and they seem to be selling. Interest rates have stayed low but there are rumblings of them rising. There are lots of mcmansions just out of town with for sale signs on them, I guess the ritchies don't like dodging potholes and living next to a town that looks like it was shelled by hostile forces.

[kickysnana]

9. Plymouth MN outer ring suburb building homes like there is no tomorrow on farmland.

Hard to understand why. 270 homes are given OK to hook up to an 8 inch sewer that already has a lot of homes hooked up to it.

[999998th word]

12. Sad part is the farmland is destroyed.

:wtf:

[StarburstClock]

10. Great article, thanks for posting.

Full of actual information.