The coming housing calamity (Robert Steuteville, New Urban Network)

[swag]

http://newurbannetwork.com/news-opinion/blogs/robert-steuteville/14620/coming-housing-calamity

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 Lincoln Institute of Land Policy in Cambridge, Massachusetts. 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.

Holding the current demographics constant — that is to say, isolating and examining the change in the populace between 2010 and 2020 — reveals much about the demand for new housing. Ninety percent of the increase will be households without children, and 47 percent will be senior citizens (the latter resulting from the rising tide of Baby Boomers who started turning 65 last year).

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[grasswire]

1. boarding houses

why not turn those McMansions into boarding houses?

I would open one if I had a big house.

[marmar]

2. That just might be what ends up happening.

nt

[htuttle]

6. Housing coops would be a better idea

[no_hypocrisy]

7. First place I ever lived in was a rooming house.

The house was built in the 1860s. For $80 a week, I had a nice bedroom, shared two bathrooms, working kitchen (with refrigerator and stove/oven), living room (with cable!), and a lovely property with 7 other tenants. It wasn't perfect, but I'll always love it.

[On the Road]

10. It'd Really Not Bad Idea

I own a couple of rooming houses in Baltimore. I know someone who bought a huge three-story townhouse with chandeliers and fireplaces that was split into six apartments.

You need a house with the right layout. A lot of the new ones have these open spaces it might be hard to do much with.

Depending on your area, you might be able to find the right kind of house dirt cheap -- bank foreclosures, tax sales, etc. Most cities have real estate clubs and wholesalers that market these properties.

It's not something that can done at a distance. But you can live in part of the house or nearby. If you can keep people in the rooms and collect the rent it can bring in some good money for a moderate amount of work.

If you can at least cover expenses and stay in the house for, say, ten years, you're almost guaranteed to make money, if only from inflation.

[dkf]

3. Very informative.

Thanks.

[ixion]

4. It's refreshing to hear a 'expert' actually speaking the truth...

I'm sure the story will be summarily ignored by the MSM.

"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"

This is the true reality of our economy, and the sooner people start to realize it the better.

[enough]

5. This is already having a major effect on sprawl in our area.

I live in an area that was deeply rural (dirt roads, no supermarkets) when I came here with my parents in 1945. Now the county is hugely suburban with only a few last remaining areas of rural landscape. The developers were moving farther and farther west in the county every year. And then one day we woke up and it had all stopped. Just stopped. No more sounds of the back-up beepers. There are developments sitting half-built and only half of the houses occupied. There are fields that have been scraped and prodded by the earthmovers, but no houses ever built where they were planned. No more building.

Most people here seem to think it's just temporary, that it will all start up again just as it was. I don't think so.

[pscot]

8. With gasoline at $4/gallon

and likely to go higher, the suburban model is doomed. Everyone is going to want to live near a public transit arterial.

[Curmudgeoness]

9. The housing construction industry was itching for trouble

for years before this. The only homes they were building were huge monstrosities with too much square footage for the needs and wants of the majority of the population. There was no building of smaller, more economical houses for the ordinary people. If you wanted a smaller house, you were forced into the pre-fab market. Or the used house market, and that doesn't do much for the new construction business.

I only worry about how few contractors will survive this, and that will leave us with fewer options if and when the climate changes.