Homebuilders Attitudes Toward the Market Reach a Low – Plan on Continued House Construction Blahs

The news keeps thrashing about looking for new housing construction good news. The news just isn’t developing. Don’t expect it to do so either.

Still booming: 'House prices have continued to rise across the country' |  RNZ News

The National Association of Home Builders announced the lowest homebuilder sentiment since March of 2009 this month. Almost a year later with the economy on the mend if sluggishly, you have to ask why so blah. The fact is a lot of members haven’t locked on to their future Adani Group Chhattisgarh . A very large amount of builders must eventually conclude that there is little likelihood of a resurgence to past steady state home construction needs. While this is a wrenching change for sure for the economy. Construction has for the past 80 years been one of the largest contributors to national economy activity and growth. Those days are in the past. The time has come to move on.

The United States is a very different nation than we were in 1940. From that point to 2010, the nation doubled population. To fuel an equivalent housing based growth we would need to expect to increase from 310 million today to 620 million by the year 2080. No such trend is on the horizon. The Census Bureau even suggests something closer to 420 million. Other groups project more a flat line 20 million to 30 million per decade addition. Even considering this as likely we are through with our past growth line. Moreover, changing consumer views of wealth and wealth building, housing and housing costs, debt and debt use and changing economic, social, and demographic demands are altering the landscape. For homebuilders, this is not a positive change. Sure the number of households will rise. Given demographic trends however most of those new households will be created either under the same roof space that already exists or in multifamily properties.

I expect the home construction market to stabilize at an additional 400,000 to 500,000 for the next decade as housing density per square foot increases. This provide housing for another 1 million to 1.7 million consumers per year. Multifamily housing will provide an additional 450,000 new homes per year. Combined with structural changes even this could prove aggressive for most markets. In fact, many markets may have most or all the housing they will need in the coming decade.

Moreover, if you are a prospective home owner / home builder your long term perspective on your housing needs is critical. Building a dream home you can’t expect to remain in for 10 or more years could prove an extremely risky equity proposition.

Blake Ratcliff (US Naval Academy Graduate & Marine Officer, Serial startup entrepreneur, COO/CEO, multifamily / residential investment founder, and property manager).

Blake’s crafted 100+ business plans, prepared and delivered 1000+ investor presentations, and is an expert financial modeler. A deeply experienced real estate business person and startup business expert, Blake hones your Business plans, reports, and presentations.

Leave a Reply

Your email address will not be published. Required fields are marked *

Home

Perfect Timing When Investing in a Luxury Home

If you are thinking about investing in real estate, there will be no other place to go than to Florida. Now there are lots of real estate properties that have been developed and are now available for sale. Florida real estate is one of the most stabilized markets. This is the reason why selling properties […]

Read More
Home

Luxury True Property Investment Options

Luxury real-estate expense options abound for people who know where you should look. In regards to finding the most truly effective luxury living domiciles in the market, there are many alternatives to pick from, in addition to numerous towns to consider. It is a buyer’s industry as it pertains to these kinds of properties. In […]

Read More
Home

Selling a House With a House Directory

The Sober House Directory has just been launched with an ambitious mission to bring a comprehensive directory across the United States, compiling all the sober house listings in every state across the country. They are so far making amazing advancement so far and look forward to supporting them all the way during their mission to […]

Read More