There has been some speculation in the financial press (such as it is) that Housing might begin to soften sometime after the first of the year. Reasons? Debt saturation of young people, interest rates firming to rising, and so forth.
But there’s another factor: A lot of people who are Baby Boomers (like us, for instance) have very large homes/property and that are not conducive to serious aging.
Until you’re into your 70’s, living on a large multi-story home sounds great. Problem is that statistically, the home is where most accidents are (because we spend more time in them as we age?) and because stairs are always a risk for a fall. As you roll into the 80’s – and hopefully beyond – there’s the matter of proximity of resources, too. Instant medic response…and maybe even a grocery store within walking distance for the eventuality of losing driving privileges due to eyesight issues.
In short, at the macro, inter-generational level – we have massively over-built housing in some respects.
Still, it’s not really an “in-your-face” rollover – at least just yet.
But it’s something to think about as we roll through this morning’s data from Census on last month’s Housing Starts…
Privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,210,000. This is 0.2 percent (±1.8%)* below the revised November rate of 1,212,000, but is 0.7 percent (±1.6%)* above the December 2015 estimate of 1,201,000. Single-family authorizations in December were at a rate of 817,000; this is 4.7 percent (±1.7%) above the revised November figure of 780,000. Authorizations of units in buildings with five units or more were at a rate of 355,000 in December. An estimated 1,186,900 housing units were authorized by building permits in 2016. This is 0.4 percent (±0.8%)* above the 2015 figure of 1,182,600.
Privately-owned housing starts in December were at a seasonally adjusted annual rate of 1,226,000. This is 11.3 percent (±10.4%) above the revised November rate of 1,102,000 and is 5.7 percent (±12.0%)* above the December 2015 rate of 1,160,000. Single-family housing starts in December were at a rate of 795,000; this is 4.0 percent (±9.2%)* below the revised November figure of 828,000. The December rate for units in buildings with five units or more was 417,000. An estimated 1,166,400 housing units were started in 2016. This is 4.9 percent (±2.5%) above the 2015 figure of 1,111,800.
Privately-owned housing completions in December were at a seasonally adjusted annual rate of 1,123,000. This is 7.9 percent (±11.4%)* below the revised November rate of 1,219,000, but is 8.7 percent (±10.1%)* above the December 2015 rate of 1,033,000. Single-family housing completions in December were at a rate of 761,000; this is 0.9 percent (±9.3%)* below the revised November rate of 768,000. The December rate for units in buildings with five units or more was 355,000. An estimated 1,062,300 housing units were completed in 2016. This is 9.7 percent (±3.4%) above the 2015 figure of 968,200…”
Later this month we will see the Case-Shiller data (last Tuesday of the month) and that one is particularly interesting because while Housing has recovered since the 2009 wash-out and some folks are recovering some of their “home equity wealth” at some point a buyer at current (or higher) prices is needed.
Judging by how well the “doom-porn” crowd is doing, not to mention young people who are stupid enough to believe Donald Trump is the End of the World incarnate, there’s little sense of “future optimism” in America these days.
Thanks in part to the negativism from the election cycle, it is becoming quite possible that the next collapse will be a combination of residential real estate reaching another peak (2017 is the 10-year harmonic from the 2007 peak) but more than that, it becomes a self-fulfilling prophecy.
But that’s why we expect equity markets to peak along about March’ish – but it could extend from there. Main thought is simply this: Demonstrators (especially the paid provocateurs) who agitate for money tomorrow are not just saying No to Donald Trump, they are trashing your economic future, as well.
Negativism is like the old “Glass Half full” problem. Up until now, America has clung to the Half Full paradigm. But thanks to the democrat party crooks, we are flipping over into “Glass Half Empty” thinking.
Should it materialize quickly – especially in light of the whining losers in politics – we really WILL have that Second/Greater Depression. And after screwing with core American values (like a border, for example), the democrats have arranged for another wave of socialism when they cause failure for the Trump administration.
Of course, none of this has come to pass yet. But it’s the line of history we’ve seen before.
The key date-range to watch will be 192 days after the Swearing in because that’s how it worked out for Herbert Hoover in 1929. From his hand on the Bible to the absolute market top.
Great rollovers in the social mood don’t happen overnight. They are more a psychological cancer and oftentimes that takes a long while to get over. In the case of the Great Depression it was about one 11-year real estate (Juglar) cycle. In the Great Depression, that turn-around wasn’t complete until almost 1941 when the Japanese were goaded into attacking Pearl Harbor. Let me see…yep. Democrats again.
Please don’t take offense that I point out the partisanship angles to economics. But we live in a country where both parties are crooked and they TALK a great game, but in the end they’re all cut of the same Tax and Spend cloth.
Which is why Trump takes office with a massive $20-trillion federal debt and with lots more to come because republican sell-out (Paul Ryan in particular) didn’t oppose the latest Obama budget which will be in force through this coming November.
Given that there’s little that Trump will be able to do, we get to sit back and watch the whiners and wait for the inevitable.
As some point, the naysayers are working hard today to make sure that glass of water turns out completely empty.
HHS nominee Tom Price is being tortured in public by the democrats. Seems some stock was bought on his behalf after he’d made decisions that could impact a healthcare company. Democrats conveniently put out the timeline wrong to make Price look like a bad-guy.
But it doesn’t stop there. The WaPo makes it sound like everyone nominated has an ethics question mark next to them. They generalize it as “Trump cabinet nominees meet growing ethical questions.”
Again, we were talking about the democrat-controlled….
Also in the What are they Smoking? Dept…
The NY Post is claiming “Advisers urge Trump to dance with Caitlyn Jenner at inauguration.”
Here’s our simple take on it: Fake news unless the purported GOP adviser(s) are specifically named.
More likely: Liberal fake news to twist up Trump relations with the LBGTQI community.
In other words, sounds like a set-up by the NY press to lure/goad Trump into a response. Look for a tweet…if Trump falls for the bait.
Hmmm…is the term “straight-baiting” out there?
With a wife like Malania, would you dance with anyone else?
Stirring Up Liberals
Still, the lefties are trying to whip up more anti-Trump moves. See the Philly Inquirer report about how “800 turn out in King of Prussia to learn how to confront a Trump administration.”
It’s a whole new industry, this “stirring up the liberals” game played by political operatives and professional victim-class “leaders.”
But the worse part is: They won’t get the blame properly due.
Those Poor International Students
Chicago Trib headline is “With Trump as president, international students ponder future in U.S.”
I have an idea: How about we put American kids in those chairs?
The $100 Mall
Galleria at Pittsburgh Mills sold for $100 Wednesday. This as we’ve been writing for months about the coming implosion in physical retail space due to online competition.
Wells Fargo foreclosed a year ago and then bought it from themselves. One valued at almost $200-million its down to $11-million in more recent valuations.
We look for the epic showdown between the Trump administration (and long term real estate owners like insurance companies and pension funds).
We’re pretty sure that’s why Amazon boss Jeff Bezos shell out $23-million for a home in D.C. That’s likely to be where the showdown over anti-trust and online will be played out.
Speaking of DC Real Estate
Am I the only one to call bullzhit on Obama for building a wall around his home in DC (pictures here) while he wouldn’t even discuss a real wall between the U.S. and Mexico? He worked to effectively tear that one down.
What’s good for the sheep isn’t on the wolf’s menu is what it looks like.