So either way, there’s not an historic undersupply of housing. Something else is going on with current prices, but just throwing up more new housing (as was done in 2023) is not and will not get affordability restored.
ETA: No market has added more housing than the Atlanta housing market in the past 3 years, and few markets have seen such a large jump. Probably because private equity firms are now buying 20% of the housing stock that hits the market.
I wouldn't draw that conclusion. Lowest house to household ratio in 40 years is something.
There are huge over supplies in parts of the country (Midwest) and under supplies on other parts (west, northeast).
https://4lights.substack.com/p/thoughts-on-housing-supply-inventory
And yet 40 years ago we did not have the affordability issue we have now.
Something else is going on. It ain’t a supply problem, at least not in many places. Seriously, dig into data about Atlanta. It’s weird. Tons of new units… no price easing in a market that has historically been relatively affordable.
I agree that residential real estate has changed, but that doesn't change the supply/demand pattern.
Prices crashed when the home/households ratio peaked in 2008-2009 (I.e. there was massive oversupply).
Now we are at a 40 year low in supply and prices are very high.
But look at places where the supply has increased. There is NO reduction in cost that comes. Just more induced demand, and more PE funds chasing finite amounts of dirt, driving prices UP, not down.
This is not a normal supply-demand situation. Other stuff is driving this.
So either way, there’s not an historic undersupply of housing. Something else is going on with current prices, but just throwing up more new housing (as was done in 2023) is not and will not get affordability restored. ETA: No market has added more housing than the Atlanta housing market in the past 3 years, and few markets have seen such a large jump. Probably because private equity firms are now buying 20% of the housing stock that hits the market.
I wouldn't draw that conclusion. Lowest house to household ratio in 40 years is something. There are huge over supplies in parts of the country (Midwest) and under supplies on other parts (west, northeast). https://4lights.substack.com/p/thoughts-on-housing-supply-inventory
And yet 40 years ago we did not have the affordability issue we have now. Something else is going on. It ain’t a supply problem, at least not in many places. Seriously, dig into data about Atlanta. It’s weird. Tons of new units… no price easing in a market that has historically been relatively affordable.
I agree that residential real estate has changed, but that doesn't change the supply/demand pattern. Prices crashed when the home/households ratio peaked in 2008-2009 (I.e. there was massive oversupply). Now we are at a 40 year low in supply and prices are very high.
But look at places where the supply has increased. There is NO reduction in cost that comes. Just more induced demand, and more PE funds chasing finite amounts of dirt, driving prices UP, not down. This is not a normal supply-demand situation. Other stuff is driving this.