Shortage of Homes Coming?
"In 35 years I've never seen a shortage of new construction like the one I'm seeing today," declares Mike Cast leman. "America needs to build a lot more houses. And in most markets the price of new homes is fixin' to rise, not fall." Castleman is in a unique position to know. As the founder and CEO of a company called Metrostudy, he's spent more than three decades tracking data on the country's inventory of new homes.
The key figures that Metrostudy collects are the number of homes that are vacant and for sale in each city, and the number of months it takes to sell all of them. Together those figures measure inventory to determine whether a market has a surplus or a shortage of new housing. Today Castleman is witnessing an extraordinary reversal of the new-home glut that helped sink prices just a few years ago. In the 41 cities Metrostudy covers, a total of 78,000 houses are now either vacant and for sale, or under construction. That's less than one-fourth of the 343,000 units in those two categories at the peak of the frenzy in mid-2006, and well below the level of a decade ago. "If we had anything like normal levels of buying, those houses would sell in 2½ months," says Castleman. "We'd see an incredible shortage. And that's where we're heading."
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