Most young people dream of owning their own home with a spouse one day. Couple of kids and the white picket fence...(ok...overly trite but close enough)
With the pandemic and the insane behavior of so many people around them...a lot of people don't want to live in an apartment any longer inside of the city...they want to live in a single family home in the suburbs. They have held good jobs during the pandemic working from home...and saved a fortune from not commuting or spending money on daycare. So they all have more than enough for a down payment on a house. Especially Millennials. This also includes Canada...(yay Canada)
So...there is now a problem...lumber is extremely high. Three times the cost (at a minimum and almost 4X)
This year alone there is a need for 1.6 million single family homes to be built in America. This is to keep current inventories of new houses for sale at the same level. Two months inventory is what currently exists. Usually there is an 18 month inventory of houses for sale. This gives the customer a choice of style and location and regular, normal pricing structures for a new home.
HOWEVER...
There are only 1.4 million single family homes going to be built according to the number of permits pulled. A deficit of 200,000 houses available for sale when there aren't enough houses to buy now.
Currently when an existing house goes on the market for sale at a ridiculously high price...sometimes 25-30% over market price for the home...a bidding war is started among 4-8 people and that asking price is long forgotten by the time the deal is finished.
All this going on with current inventories of houses for sale...and current inventories are about to evaporate. Apartments are also in demand in some locations. Mostly luxury apartments that are larger and are what are referred to as condominiums.
If this trend continues...people are going to become homeless. Living in tents and etc.
Currently there is a shortage of appliances (contractor grade made in Vietnam and China) and other parts and supplies for building homes.
Most subdivisions are built using frame construction...meaning a site is prepared with a foundation and stubs for plumbing, sewer, gas, electric, and telecom. The house's walls, complete with windows as well as ceiling joists made in the same fashion, are made at a factory and trucked out to the site and assembled. A custom house is made with "stick construction" where just a bunch of lumber and OSB is shipped off to a site and made on site by a more knowledgeable crew. It takes longer and more skill so it is usually referred to as a custom home. Usually these houses are larger and nicer...less "cracker box" style with at least 7 gables to the roof. Custom homes are nicer with nicer features. (rounded corners and crown moldings) Custom homes are just that too...custom built with features specified by the customer...which can be things like electric outlets in floors and etc. Prewired for flat-screen television viewing rooms and etc. Built in shelving. And most importantly....THE HOME OFFICE.
So...currently there is a stalemate. No one is moving...people don't sell their house unless they can be confident of having another to move into. Empty nesters are now not moving...and if they somehow secure a smaller home/condo to live in they are not selling their current home...they are renting it out and letting it appreciate in value over the next few years.
Oh...to live somewhere besides Sesame Street.
With the pandemic and the insane behavior of so many people around them...a lot of people don't want to live in an apartment any longer inside of the city...they want to live in a single family home in the suburbs. They have held good jobs during the pandemic working from home...and saved a fortune from not commuting or spending money on daycare. So they all have more than enough for a down payment on a house. Especially Millennials. This also includes Canada...(yay Canada)
So...there is now a problem...lumber is extremely high. Three times the cost (at a minimum and almost 4X)
This year alone there is a need for 1.6 million single family homes to be built in America. This is to keep current inventories of new houses for sale at the same level. Two months inventory is what currently exists. Usually there is an 18 month inventory of houses for sale. This gives the customer a choice of style and location and regular, normal pricing structures for a new home.
HOWEVER...
There are only 1.4 million single family homes going to be built according to the number of permits pulled. A deficit of 200,000 houses available for sale when there aren't enough houses to buy now.
Currently when an existing house goes on the market for sale at a ridiculously high price...sometimes 25-30% over market price for the home...a bidding war is started among 4-8 people and that asking price is long forgotten by the time the deal is finished.
All this going on with current inventories of houses for sale...and current inventories are about to evaporate. Apartments are also in demand in some locations. Mostly luxury apartments that are larger and are what are referred to as condominiums.
If this trend continues...people are going to become homeless. Living in tents and etc.
Currently there is a shortage of appliances (contractor grade made in Vietnam and China) and other parts and supplies for building homes.
Most subdivisions are built using frame construction...meaning a site is prepared with a foundation and stubs for plumbing, sewer, gas, electric, and telecom. The house's walls, complete with windows as well as ceiling joists made in the same fashion, are made at a factory and trucked out to the site and assembled. A custom house is made with "stick construction" where just a bunch of lumber and OSB is shipped off to a site and made on site by a more knowledgeable crew. It takes longer and more skill so it is usually referred to as a custom home. Usually these houses are larger and nicer...less "cracker box" style with at least 7 gables to the roof. Custom homes are nicer with nicer features. (rounded corners and crown moldings) Custom homes are just that too...custom built with features specified by the customer...which can be things like electric outlets in floors and etc. Prewired for flat-screen television viewing rooms and etc. Built in shelving. And most importantly....THE HOME OFFICE.
So...currently there is a stalemate. No one is moving...people don't sell their house unless they can be confident of having another to move into. Empty nesters are now not moving...and if they somehow secure a smaller home/condo to live in they are not selling their current home...they are renting it out and letting it appreciate in value over the next few years.
Oh...to live somewhere besides Sesame Street.
