The term 'housing shortage' is used by NMHC and other trade groups, then repeated by all development companies and the government. But what data goes into the model that shows there being a shortage of housing units?
There are several markets with 10%+ new supply ratios, as well as decreasing rents and occupancy rates.
The term 'housing shortage' doesn't seem dynamic to me where other variables are accounted for, like market, HHI's, etc.
Isn't there too much housing (from an investor's point of view) in some markets... like Indianapolis, Houston, ATL, etc.?
I've asked a few grey-haired real estate pro's this question; how exactly do you know there is in fact a "US housing supply shortage", and I haven't received data-backed convincing responses.
Bump
It's a matter of definition. There isn't "too much housing" in the markets you mentioned. There is just too much new housing to support the current rents / housing prices in the short term.
Housing is slow moving meaning that it takes people a while to make decisions on moving, where to live, buying vs. renting, waiting out their contracts, etc. So when new supply hits a market, you see pullbacks in rents / housing prices because it takes a while for them to fill in the gaps. That doesn't mean there isn't a high-level housing shortage though.
When you look at a place like Atlanta there is oversupply in some of the core submarkets like Midtown and Buckhead for multifamily, but looking at it MSA wide there's clear undersupply. It costs the same to rent an apartment 40 miles outside of the city as it does in Midtown right now. The single family market is also severely undersupplied and I think the main direction of comments regarding housing shortage mainly because all of the easy to develop or easy to entitle land is gone unless you go 50+ miles out. That applies to most Sunbelt cities.
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