San Diego Housing Market News and Analysis
Too Many Homes, Certainly; How Many Too Many?
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Submitted by jg on February 13, 2007 - 10:57pm
When I read that 30% of San Diego homes for sale are vacant; when I see homes and condos on whom construction has stopped mid-stream for months, now; I say to myself, we are way overbuilt.
How overbuilt are we?
Currently, we have 2.38 folks per housing unit (home, apartment). In 1980, the ratio stood at 2.56; in 1970, the ratio stood at 2.96.
In a separate analysis of consumer spending and savings (http://piggington.com/depression), I came to the conclusion that consumption started running amok in the early '80s. Thus, 1970 and 1980 may be good back of envelope markers for 'normal' times.
If our housing density 'should be' 2.56 folks per housing unit (1980 standard), we have 9.2MM 'excess' housing units, today. If our housing density 'should be' 2.96 folks per housing unit (1970 standard), we have 14.7MM excess housing units, today.
Historically, the number of homes and apartment units built annually runs ~2.0MM. Given an 'overhang' of 9.2-14.7MM housing units, we would require no new housing units be built for 5 to 7 years.
Simplified analysis, certainly. But, I think it gives a ballpark sense of what we could face.
Repent, rent, save, and arm.
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