And the amazing thing is that they need a place to live. We wonder why housing does not react the same way as the stock market, this may be an answer. The United States is the only industrialized nation to have a growing population, and the majority of the growth is in the west and the south.
So when we get all worked up about housing prices, we have to remember that there is a demand that needs to be fed. Mazlow never said anything about need to have a Treo, but shelter is in the base of the pyramid in the physiological needs which includes shelter.
Now add another facet to how our usuage of real estate has increased in the past 20 years, and we are starting to understand the reason that real estate prices will not fall 60 percent like the Nasdaq did in 2000–2001.
– Each American occupies 20 percent more developed land — housing, schools, shopping and roads — than 20 years ago. via Reuters.com.
So the combination of a growing populace and the populace that is using much more space per person will allow significant growth, and a significant base, for housing to maintain. Yes, we will have dips and bubbles, but they will be of a speculative or economic reason.
The demand for housing will continue unchecked.
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I agree with you that there would be organic growth driving the need for housing. But there are two parts to it.
1) The West and South have the highest growth rates – whereas the NorthEast has minimal growth (or in some cases, decline). This would show up in differential growth expectations.
2) The choices then are between existing housing stock and new construction. Given that there's a time lag for construction, there will be some growth in value – but as it goes too high, the alternative of building new, at a much lower cost, becomes more attractive.
Opportunities will always be present – however, it might not be as good in specific cases.
Come on Tom. We have a record amount of inventory and you still are talking about demand?