Forty Million Houses in the US That No One Needs
Monday, June 25, 2012 – by Staff Report
40 million houses too many ... one explanation for falling prices ... America has too many BIG houses – 40 million, to be exact – because consumers are shifting preferences to condos, apartments and small homes, experts told the New Partners for Smart Growth Thursday, holding its 11th annual conference in San Diego through Sunday. Relying on developers' surveys, Chris Nelson, who heads the Metropolitan Research Center at the University of Utah, said 43 percent of Americans prefer traditional big, suburban homes but the rest don't. "That means we are out of balance in terms of where the market is right now, let alone trending toward the future," he said. He estimated that this demand suggests a need for 10 million more attached homes and 30 million more small homes on 4,000-square-foot lots or less. By contrast, demand for large-lot homes is 40 million less than currently available. "Is it any wonder that suburban homes are plummeting in price, because there is far less demand of those homes than in the past," he said. – UT San Diego
http://www.thedailyb...at-No-One-Needs
Whats that 40 million homes of this size cost us ?
McMansions are not ordinary houses. They're supersized with 3,000 to 4,000 feet (at least, and few people nowadays consider 3000 sq ft a "McMansion" which is scary in of itself) of living space. And during the boom years of the mid-2000s many sold for way upwards of US$ 500,000, especially on the East and West Coast. Add up the figures and that's a whopping US$ 20 trillion.
That's right. Wipe US$ 20 trillion or so off the gross national product, and you're looking at a serious market impact. Twenty trillion is no one's "small change."
There are now, and have been many other examples of capital mis-allocation like this in the US (try commercial RE, including many franchise restaurants, dry cleaners, hair cutting salons, tanning booths, etc etc) and in particular world wide, like in China, or even the BRICS. Its a world wide problem, largely induced and created by none other than Alan Greedspam. He spammed every one of us into major greedy activities.
Think about it !!! How absolutely absurd it is that someone, an institution no less, is willing to lend you money for 30 years at under 4%, and closer to 3 %. 30 YEARS !!! And you think your home price is going to increase from here in this kind of environment ????
What part of that message don't people get ?????????????
And how is it that so many people can now purchase so many flavors of $50,000 vehicles ? Again, massive mis-allocation of capital, especially considering people are driving less and less these days. They do it NOT because they can actually afford it. Its done out of greed and dirt cheap eazy, sleazy money.
And so you truly believe that stocks have not also seen eazy sleazy money pour into them, if for no other reason, than there is literally no other place that money hasn't flowed into yet ? So it keeps on coming in, to line the pockets of the dealers, who then choose and pick their time to distribute it at higher prices, then they drop in value, after the hot potatoe has been passed a few times. Wash, rinse, repeat. Over and over again, for the next 20 years.
And all of this keeps being fed, by our FED, over and over again. Addictions always end badly, and this one is no different.
