At least some analysts are bullish on housing.
William C. Wheaton, professor of economics at Massachusetts Institute of Technology, argues that the housing market is due for improvement, calling home construction, “a sleeping giant that is about to wake up.”
Wheaton believes that because there has been so little construction that demand exceeds the level of building and it will soon absorb excess inventory.
“Housing construction will not only rise, but it will stay high for a while, which didn’t happen in previous recoveries,” Wheaton predicts.
At MonsterHousePlans.com we believe we are in a “Pre-Boom” period!
Sure, there may be a pent-up demand for people who desire a new home, but the ability to buy one depends on a variety of factors. The biggest factors are probably immigration rate, growth in household income, the cost of energy (for single-family homes) and credit availability. The last I heard is that the government bought about $1 Trillion in mortgages, so the Fed is supplying most of the credit for mortgages these days–it has the most power to determine future demand. I am not supporting large government subsidies, however, because they are already so excessive.
The way that we can create homes that have a demand that endures for the rest of the decade is to build homes in compact sites–such as large cities or inner-ring suburbs, where people can flee to avoid excessive driving and heating bills, and homes that are suitable for renting to multiple households.
I agree with much of what you said. However, I feel that we cannot dictate where people live. If someone chooses to live on 20 acres in Montana, they have the right to do so. As for homes suitable to multiple households, there are problems that need to be addressed. First of all, zoning codes need to be amended to allow additional family members to live on the same property. However, I have seen areas of Los Angeles where there are a great number of houses that have been turned into multifamily housing multiple families, often here illegally, in converted garages and back yard sheds. This erodes the value of other home in the neighborhoods that are choosing to abide by the law.