How Everybody Miscalculated Housing Demand
July 29, 2021 5:55pm by
Barry Ritholtz
Why are there too few houses in general and too few for sale?
The pandemic has revealed a supply/demand imbalance in the Housing Market, but the reasons are far less obvious than assumed.
Sure, the pandemic sent lots of urbanites out looking for a place in the burbs or a vacation property where they could WFH. But the underlying structural conditions for a massive supply shock were decades in the making. Allow me to chronologically explain how we got to our improving but still short supply of homes.
The 20-year chart above shows the ratio of houses for sale to houses sold — it’s not ideal, but it will do for our purposes. Consider what each decade had in store for real estate: