Thursday, October 22, 2015

The Latest and Confusing Housing Reports

Trying to track the ups and downs of the housing market is like handicapping the various races for president. Whose up, whose down, and why—place your bets, chumps. It’s all a jumble of meddling politicians, social correctiveness (the new politically correct), flat interest rates, job migration, oil prices, NIMBYism, millennials, boomers, college debt, and Fannie-Mae and Freddie-Mac (who do control the loan market – look HERE).

The following articles are some of the more interesting articles of the last few weeks that deal with this whole “roof over my head” issue. Remember that the days of “market rate” housing are gone; in some areas more than a third of a home’s cost (and more) can be attributed directly and indirectly to local entitlement and underlying land costs. To believe that the housing market responds to the supply and  demand theories of the last century are well, so last century.

Who’s really renting? Good discussion HERE on the renters that are populating the new apartment complexes.

The Wall Street Journal noted that one of the biggest problems in the housing construction is labor – seems that when those Mexicans went home they took their abilities with them – they have not come back (HERE for a different look). 
Also HERE,  for a take on the impact of this shortage of construction workers.

Housing Starts UP and DOWN – Whatever
It seems that every week we get hit with the latest in housing stats from somewhere – and even during the same week they have different conclusions. Take your pick:
Here’s the New York Times’ take: U.S. Housing Starts Increasein September:  
Next month they will both print some form of a retraction.

And HERE'S what the impact is on housing stocks.

And Home Prices Keep Rising – One Reason:
If you have to provide one subsidized unit (affordable) for every ten approved units, isn’t it fair to believe that every one of those free-market units is now more expensive? I assure you the builder is not going to eat the difference no matter how big his heart. Affordable housing hurts everyone, but it wrong to believe that – GO HERE on Portland, Maine’s latest move (Portland, Oregon did something like this years ago). 

And in San Francisco they are still leading from the rear, HERE:

And it’s not YOUR fault:
When it comes to buying the consumer has no clue, they can’t make correct and appropriate decisions, obviously we need the government to step in, or so says Noble Prize winning economist, Robert Shiller HERE . 
But then again there are few other economists that would argue his point – i.e. Ludwig von Mises for one.

And it’s not your fault either – Part 2, 
Apartment builders should have thought about the THIS change:
And now we have to think about the new paradigm: On-Line Shopping. Where do apartments store and then deliver packages to their tenants? Should new homes have more secure exterior package drop-offs - HERE?

Stay Tuned . . . . . .

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