The Housing Double Boom

Fri, 05/06/2011 - 04:18 EDT - Seeking Alpha

By Karl Smith
I have no idea if this is in reference to anything I have written but Bill McBride is emphasizing the following:

This fits with the recent Reis data showing apartment vacancy rates fell in Q1 2011 to 6.2%, down from 6.6% in Q4 2010, and 8% in the Q1 2010.
Two key points I’ve made over and over are 1) with falling vacancy rates and rising rents, the number of multi-family starts will pick up sharply this year (but still be well below normal), and 2) this pickup will lead to a positive contribution to GDP and payroll jobs for construction in 2011, the first positive contribution for either since 2005. This survey reinforces both points.

I pointed out the differences between my perspective and Bill’s in an earlier posts. I want to make sure that I recognize that Bill has been forecasting an increase in multi-familyComplete Story »

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Comparing Payroll Job Growth in 2011 to 2010
Although payroll job growth slowed sharply in May, with only 54,000 net jobs added, job growth this year is well ahead of 2010. Note: I'll have an update to my economic outlook later.The first table below shows payroll job growth in 2010 and 2011 through May (excluding Census hires in 2010). The third column is total payroll growth for 2010.Although job growth is sluggish relative to the slack in the labor market (with the unemployment rate at 9.1%), 2011 is clearly better than 2010 through May.
Do Rising Rents Leads to Runaway Inflation?
Tim Duy submits: Karl Smith at Modeled Behavior notes Bloomberg’s story on rising rents, summarizing it with: In any case the point is that rents are rising, and rents are hefty portion of inflation.
Rising rents may prod affluent U.S. city dwellers to buy homes: Reis
(Reuters) - U.S.
Apartment REITs Should Benefit From Rising Demand
By Michael Stubben:The apartment sector has entered the recovery phase of the commercial real estate property cycle. Declining vacancies and rising rents highlight the recovery phase and point to higher total returns for investors. The mid-term prospects for apartments are further strengthened by powerful demographic trends that will fuel demand for apartments creating strong growth in apartment rents and strong returns for investors.
Checking in on the coming boom
KARL SMITH continues to argue that a housing boom lurks around the corner:Lots of people said we are not going to see booming construction for a long time and seemed to feel the fundamentals backed that up.Yet, over the beginning of 2011 lots of data series have started to turn in the same direction. We are seeing growing consensus that this is simply not sustainable and something is going to have to give.
Apartment-vacancy Rate is 7.8%, a 23-year High
Landlords Offer Incentives to Stay Put
Trying to Make Sense of Job Openings Data
Modeled Behavior submits: By Karl Smith Here is a calculation I am keeping an eye on: Job openings minus quits. The idea is that this might capture the aggressiveness with which businesses are looking for workers.Obviously, if you have a lot of quits, then even in the same business climate you need new workers. So we take out quits.[Click all to enlarge]
The Boom Within a Boom
Modeled Behavior submits: By Karl Smith Earlier I fretted about the possibility of an Aggregate Supply shock to housing. Well what if that doesn’t happen and resources do move as freely as my mental model of the economy predicts. It could produce roaring growth. I draw a parallel to prediction I made earlier about the Great Recession. In early 2008 I began to become concerned about the possibility of a recession within a recession.
Small Business Survey: What’s a Little Data Between Friends?
Modeled Behavior submits: By Karl Smith
Landlords See Increase in Apartment Rentals
Apartment Rentals Surge in U.S. on Foreclosures, Jobs

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