No. of Recommendations: 6
Once again, national figures mean little because it's a local or regional issue. There are ten
thousand homeless people in San Francisco (and many of them are hanging on to jobs) while I'm sure
there are a few cities in the midwest with ten thousand vacant dwellings each.

But by the same token, the local housing shortages in places like San Francisco aren't due to a
"shortfall" of activity by the house building industry which hasn't spotted pent up demand.
I'm sure many a company would love to build scads of dwelling units there tomorrow, were the permits available.
Capped supply combined with rising demand and soaring average incomes will do some strange things to prices. (I live in Monaco...)

Though the churn "hot spots" you mention are occurring in multiple places, that kind of anomaly is in the minority. The tail, not the dog.
Most ZIP codes that used to have people living there still do have people living there. Just a few more or a few less at the margin.
Remember, the numbers I mentioned are total dwelling unit counts...abandoned houses in Detroit are
no longer counted, new condos in Seattle are.
That kind of churn will show up as a flat line component in the dwelling counts as people move around, even though they show up as "new" in the housing completion figures.

It seems that the national averages are telling a mostly meaningful story...increases in net dwelling
count aren't that far from new household formation rates, and running relatively steadily at that level.
That seems much more plausible than the narrative that there is a massive hidden overall backlog
that is not being addressed--and that for some mysterious reason house builders haven't noticed it.
The only reason for that belief is that build rates aren't nearly as high as they used to be...but they used to be way too high, so that's OK.

Oddly, things seem to be relatively OK overall, considering we're late in the cycle.
A lot of prices are cyclically high, meaning LTV ratios are soon to be worse than they appear at the moment.
But it seems to be more or less a normal level for "before the slowdown" in a typical housing cycle.
As in any cycle, some pockets are really overheated, but it doesn't seem systemically widespread and dangerous.
If they were building 2 million units a year nationally, it would warrant a lot more worry.
They wouldn't be filling a backlog, they'd be filling a balloon.

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