Glut: 1.8 million units of “excess housing” in U.S.
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Calculated Risk, a math whiz of a blog, crunches the numbers today and reports there are 1.8 million units of ‘excess housing’ in the United States today.
Just to be clear, CR is not talking about vacant units -- there are always a lot of vacant homes and apartments; the exercise is to calculate the gap between current, elevated level of vacancies and normal levels of vacancy. Here’s the math:
If we add this up, 760 thousand excess rental units, 825 thousand excess vacant homes, and 200 thousand excess new home inventory, this gives about 1.8 million excess housing units in the U.S. that need to be absorbed over the next few years. ... These excess units will keep pressure on housing starts and prices for some time.
I would encourage those still looking for a bottom in the housing market to re-read the previous sentence. Or, read this sentence from Calculated Risk’s coverage of today’s Case-Shiller report:
Prices are still falling, and will probably continue to fall for some time.
Or, you can read this from LA Biz Observed blogger Mark Lacter’s take on the L.A. housing market, which he wrote for the Financial Times:
“This is going to be a slow burn,†says Christopher Thornberg, a principal at Beacon Economics. ... “Eventually, prices will hit bottom and when they hit bottom they’ll stay there for years.’
-- Peter Viles
Thoughts? Comments? E-mail story tips to Peter Viles.
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