It may sound ironic and hard to believe, but a new housing shortage may be on its way. The recent shortfall in home building is less than half the long-term run rate needed to meet the nation’s natural population growth.
The weak economy has masked this shortfall and has put a damper on homebuying. However, once the job market rebounds, a new pent-up demand could get unleashed causing shortages and rising local prices.
Previous boom towns, such as Las Vegas and Miami, should provide ample inventory to counter any strong pent-up demand. 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 problems.
If you think this theory is flawed, think of the Echo Boomers (aka, Gen Y or Gen Next, those born roughly between 1982-1995). The offspring of the Baby Boomers, they are 50% larger than their parents’ generation. The Echo Boomers are just now starting to enter the housing market. Can you imagine the impact they will have in years to come? Add into this equation that the Echo Boomers will be buying alongside repeat buyers from other generations, and you can quickly surmise that in the foreseeable future we are going to have a shortage in housing.
Read the CNN Article
Read the Inman News Article