Real Estate News & Commentary

Recession Watch: Are We Overbuilding in the U.S.?

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This blog is meant purely for educational discussion of finance. It contains only general information about financial matters. It is not financial advice and should not be treated as such.

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The U.S. economy has been growing for 11 years, making the current expansion the longest in its history. So, when is the expansion going to end?

This is the question on everyone’s mind. Although we can’t predict when the recession is going to start, we can assess the market risk intellectually using statistics and then prepare for it strategically.

With that, let’s discuss the current status of the housing market and how to minimize risk and not lose money.

The Housing Market

Median Historical Housing Price

Figure 1. Median Single Family Home Price in America 1953-2019

Based on the graph above, our inflation-adjusted home price in the beginning of this year just reached the pre-recession high. One might think that we’re in a bubble, and it’s time to sell. On the contrary, I think home values still have room for growth, since they typically increase in the long-term, and we just spent the last decade recovering!

“Median housing price just reached pre-recession high” is a scary fact, but let’s look at this from a different perspective. Our current S&P 500 stock price is 3150; the previous peak was 1550 in 2007. It’s double what it used to be!

Even though the S&P 500 price doesn’t account for inflation, the difference is still much greater than that of housing. If the current housing market were in a bubble, then the stock market is in a way worse situation. Not to mention the Nasdaq Composite is currently triple of the previous peak.

Are We Overbuilding?

The short answer is NO! We’re actually not building enough. Here’s why!

Figure 2. Housing Units Completed Analysis (1970-2018)

The number of housing units we built in 2018 was 1,185,000, compared to 1,979,000 in 2006. We are currently building at 60 percent of the pre-recession rate—not to mention that we now have a higher population.

By adjusting for the population size, the number of housing units completed in 2018 was only 0.36 percent of the population, compared to 0.66 percent in 2006—a drastic decline in the building rate per capita.

Related: 8 Ways to Identify the Best Places to Buy Rental Property

The economy has been doing well and our interest rate is at a record low, so why are we building at a slower pace?

Although our interest rates are at a historical low, the more conservative underwriting by banks, such as debt coverage (DCR) and loan to value ratio (LTV), combined with our cautious mindsets, have limited the pace of growth.

Conclusion

Since housing prices have more room for growth, and we haven’t saturated the housing market by overbuilding, I’d argue that housing in the U.S. is still at a healthy state. However, this doesn’t mean that we won’t have a recession. There are still other factors that can cause our economy to decline, which will inevitably impact real estate.

How Can Real Estate Investors Reduce Risk

Warren Buffett’s No.1 rule: “Never lose money.”

Here are some very important tips that you should follow, especially at this stage of economy.

Local Absorption Rate

Although we concluded that U.S. housing in general is not overbuilt, that doesn’t mean this is the case in every city. Some cities are more overheated than others, so try applying the two methods I presented earlier (in Figure 1 and Figure 2) to the cities that you’re interested in.

In additional to that, you should look at the local absorption rate for both single family and multifamily. If you notice that local housing is overbuilt, then start underwriting more conservatively by using more stress tests.

Single Family

For single family, it’s a red flag if you see absorption rate lower than 15 percent. That means less than 15 percent of the single family supply was sold in the last 30 days.

For example, in a market where there are 100,000 houses available for sale, only about 15,000 houses were sold in the last month. This is a 15 percent absorption rate

When the rate is lower than 15 percent, the local supply is much higher than the local demand. This is now a buyer’s market, which means the selling price is usually below the listed price. The local housing economy is starting to cool off.

hand holding needle near bubbles set against blue sky background

Multifamily

The metric for multifamily is a bit different, because you are not selling commercial properties on a daily basis. Instead of looking at how fast the commercial properties are selling, you want to understand how fast the rental units are being leased out.

For multifamily, use the absorption period, which is defined as the amount of time it takes to lease out the current vacant supply. If the absorption period is more than three years, then it’s a sign of oversupply.

For example, Los Angeles currently has 21,000 lease-up vacancies, and the average annual absorption is 10,000 units, which means the absorption period is about two years.

Reducing rent is another sign of oversupply. When the apartments are not leasing out fast enough, rents will naturally decrease to retain or attract tenants. Declining rent is not a good sign for the housing economy.

Related: 5 Ways to Reduce Risk When Investing in Multifamily Real Estate

Buy for Cash Flow

One of the common ways to lose money in real estate is selling the property while the market is down. Obviously, nobody wants to sell at a loss, but there aren’t many other choices when a house is losing money or when the property needs to be refinanced.

To reduce the risk of this from happening, you want to make sure that your property’s debt coverage ratio (NOI divided by debt service) is still above 1.4 after several different stress tests. The stress test could be lower economic occupancy, higher interest rate, or lower rental growth.

You also want to avoid using cash flow for renovations. If you’re renovating a house or an apartment complex, make sure you raise equity for this, and add an additional 15 percent contingency into your budget.

To avoid having to refinance your property, talk to your loan officer, and try to secure a permanent loan as soon as you can.

So… Should You Keep Investing?

The best strategy is to make good investments consistently overtime. It’s very difficult to predict the next recession or to quickly adjust your real estate portfolio.

The bottom line is: even though the next recession will hurt your property's value, it'll eventually recover. Stress test and make sure you have enough cash flow to cover the expenses and loan payment—even during a market downturn!

This blog is meant purely for educational discussion of finance. It contains only general information about financial matters. It is not financial advice, and should not be treated as such.

What do you think about the current state of the economy? Are you still investing or sitting on the sideline?

Please share your thoughts below!

Jay, a civil engineering graduate from UCLA, is an active investor, developer, and writer. He is the President and Founder of Hestia Capital, which syn...
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    Wenda Kennedy JD from Nikiski, Alaska
    Replied 3 months ago
    I agree. We need more building -- not less. BUT, we need most of that building activity in moderately priced homes and residential units. Over-regulation and arduous requirements have often made the lower end construction business no longer profitable. It has pushed builders toward the higher end of the real estate market. So, when you segment the market into price ranges, one can draw a different conclusion for those different price points. This reality is triggering more activity in nitch and alternative markets such as manufactured housing and use conversions of other properties (ie. commercial and industrial units converted to residential uses -- think of a new use for white elephants!). People must live somewhere. This pressure on the moderate end of the housing market is creating great opportunities for savy investors.
    Jay Chang Developer from Los Angeles, CA
    Replied 3 months ago
    Great point Wenda. I wonder how the numbers look for luxury homes/apartments over the decades. I'm sure it's much higher than the moderate end of the housing market. In addition to regulation, increasing construction cost is also a culprit for driving the luxurious real estate market. The cost to build is so expensive that moderate end of housing just won't pencil out.
    David Roberts from Brownstown, Michigan
    Replied 3 months ago
    Thanks for the article. People should get away from boom or bust also. A pullback may only be 5-10 percent. I would guess real estate wont "crash" for quite awhile. 10 yrs ago is still in the rearview and it seems lending regulation is still good. Im in the rust belt where appreciation isnt crazy. That said, I am not implying that the author is a boom or bust extremist, but it seems like that is how people talk. If we are not appreciating, we are crashing.
    Terry Lowe
    Replied 3 months ago
    If you hold your properties for long term it doesn’t matter if they go down in value 5-10 percent once in a while. Actually, that’s a good time to buy, and then all your properties will trend up until the next little downturn.
    Jay Chang Developer from Los Angeles, CA
    Replied 3 months ago
    It definitely doesn't have to be black or white! Although I'm optimistic about the healthy real estate market, I'm not so sure about our economy in general. A lot of corporations have a crazy amount of debt, and our interest rate is so low that we won't be able to stimulate the economy as much as we did ten years ago.
    Chris H. Investor from Spokane, Washington
    Replied 3 months ago
    I have mixed feelings on this. Here's the thing; I don't actually think the median home price should increase much faster than inflation. It might in a local area- a city becomes denser, prices go up- but that also results in rural areas becoming cheaper. Los Angeles goes up, Pittsburgh halves; housing is sort of zero sum if construction keeps up with population growth, though you may have some houses going up in value while some are left vacant. It's concerning that it is going up so much faster than inflation. But I think it's directly correlated with the low construction rates. Housing is supply and demand based. If demand goes up (more people move to the US, or to big cities), and supply does not go up (we aren't constructing enough housing, or the housing can't be placed where it needs to densely enough because of zoning laws), then prices go up. I don't think we are in a "bubble" in that houses are overvalued. But we might be in a *sort* of bubble in that housing prices are going up because we aren't building enough (low supply), and we aren't building enough because of zoning laws in big cities. If construction were to take off (perhaps because of zoning law deregulation?) we could potentially see an "on paper" housing crash. For example, if you were to increase the supply of houses in San Francisco by, say, 50% (an insanely high number) by building a ton of tall apartment buildings, prices would decline. Why? More supply. Same number of tenants competing for a larger number of houses. This is great for renters, great for developers, great for the economy, but might be bad for existing landlords. However, I say "on paper" because it would only affect dense urban areas that are supply-limited. People in smaller, mid sized cities that haven't been constrained in terms of construction wouldn't have a "crash". And the crash in values wouldn't be caused by people not buying houses; it would simply be because there's more houses available. I'm not predicting this; I don't see any strong movements to deregulating zoning or fixing our construction problems in the short term. But it IS a risk in those areas. I think dense urban areas (San Francisco, Los Angeles, Seattle, NYC) have artificially inflated prices because of house supply (i.e. construction and zoning) issues and could potentially decline in value if that got fixed. So I, personally, avoid buying *non cash flowing* properties in those areas. (I'd happily invest in a cash flowing property; I just don't like appreciation bets when the market is so high.) Remember, housing is very regionalized. I'm wary about low margin dense city property purchases at the moment; but I'm very bullish on mid-sized cities that still have urban amenities. I think the longer our construction supply problem goes on the more people are going to move to those cities as they get priced out of the land in the dense cities.
    Valentin MI Ossman
    Replied 3 months ago
    One of the major components of inflation is housing cost. In some areas, that's the largest hosehold expense. So comparing house pricing to inflation is misleading. For example, I can attribute the hose price growth in recent years to the increased exposure to global economy and cheaper consumer goods coming from East Asia and central America where the labor cost is lower. This means that due to taxation changes, we'll see a fast increase in inflation in the comming years that will compensate for the disparity between housing costs and general inflation index. This will probably contribute to higher interest rates and higher rents changing the rent vs. buy landscape and so on. The butterfly effect...
    Daniel Bates from Mc Clellanville, South Carolina
    Replied 3 months ago
    Should number of homes built be used as any sort of metric? They don't disappear one year after construction, in fact they stay around a pretty long time. Let's just say for simplicity that there are 100 people in the US. No one is homeless and they're all single adults, so we have 100 homes that they are all living in. 5 new people move in, 5 more are born (they are born fully independent and live on their own in this world), and 5 died, so we have a net gain of 5. In that same period only one house became unusable. We build 6 new houses and everyone is good again. One year builders built 16, so we had 10 extra. The next year they didn't build any because we had too many the year before. How did the difference in the number of homes built predict anything, yet alone a depression? I know this is a gross simplification, but I spelled it out to show that houses aren't like running shoes that need to be replaced every year.
    Jay Chang Developer from Los Angeles, CA
    Replied 3 months ago
    Just to clarify, the intent of the article is not to predict the next recession. The intention was to analyze whether the housing market is still healthy, and how to reduce risk in case of a recession. A recession can be triggered by any things, but I don't think it will come from housing for the next several years. It could also just be a 10-15 percent adjustment like what some people are saying. We don't know, but we should prepare for it.
    Vaughn K. from Seattle, WA
    Replied 3 months ago
    Well, namely it's that due to some houses becoming tear downs over decades, and population growth, you can kind of see where that equilibrium is... And we're building too few houses to fully satiate that demand. Which has driven prices up artificially due to lack of supply. Which has raised rents too. Which has forced people to cram together with roommates into houses when they may have preferred their own place, or they've settled for a smaller place than they would like. Imagine that there was a shortage of coffee, and the price more than doubled... Everybody would still have some coffee to drink, even though they would prefer to drink more coffee, it's just not there... So everybody makes due with paying far more for less coffee. Civilization survives, but it's not optimal for peoples well being. That's kind of where we're at with housing construction. People have adjusted by doubling up in units, paying higher prices, etc, but we'd all be better off if costs were lower and there were more units available. There's also a huge mismatch in WHERE housing is available. All the big companies have (stupidly IMO) decided to cram all their jobs into ever fewer cities, leaving many pretty major cities high and dry... So there is an excess of housing in Pittsburgh or Cleveland, and a huge shortage in San Francisco or Seattle. This trend finally seems to be easing up a bit, with more companies bailing out of the major coastal areas because they've just become too expensive to operate in. Hopefully it speeds up!
    Daniel Bates from Mc Clellanville, South Carolina
    Replied 3 months ago
    I understand supply and demand principles. In 2007 did real estate values plummet because builders had built too many homes and therefore the supply was too high? No, the ratio of homes to people didn't even change, but real estate values dropped. Supply and demand affect real estate and there may, in fact, be a housing shortage, but my point was that construction (increasing supply of new homes) doesn't necessarily have any correlation with the supply of homes. Coffee is a commodity that has a single-use, where homes are resold, so it's apples to oranges. Think about gold. If I told you that from 2000 to 2009 100K ounces were mined but from 2010 to 2019 only 50K ounces were mined, would you be able to tell me whether gold was a safe investment? No, there are too many other factors. The actual chart in this post that accompanies the discussion illustrates that recessions have happened in the past regardless of the number of homes built, so as a barometer, I just think it's an extremely week one. If anything, it's a local barometer, not a national one due to the regional available issue that you mentioned. Everybody in Ohio has moved to South Carolina, there has to be a surplus of homes there. Now people are leaving California in droves, maybe that will lessen their housing shortage. :-p
    Vaughn K. from Seattle, WA
    Replied 3 months ago
    I agree that it's not the ONLY factor. There are lots of factors driving pricing issues. The mismatch of where housing is available is the primary factor in trendy coastal areas IMO... But that is in fact a supply and demand issue at its heart, and more construction would have eased that, even if it weren't enough to fully satiate the market.

    Then there's monetary policy, speculative behavior of many players, etc. There are a lot of issues... But I have a sneaking suspicion that if we did "overbuild" it would in fact drop prices, even against all the other issues. Supply and demand is the strongest factor IMO. National starts are not a useful metric per se, but they're kind of most of the picture if one is looking at any given city/region. If a million condos went on the market in NYC tomorrow as if by magic, do you really think that wouldn't dramatically lower prices? Of course it would.
    Michael Casile
    Replied 3 months ago
    Very insightful article. Thanks. I'm in a suburb of Raleigh where we currently have > 5000 units just completed or in process (probably a 25% increase on the base). Ironically, while things are selling/renting nicely ... it would appear that even that is not overbuilding. The problem we are seeing, however, is that the infrastructure just caught up to where things were before this boom. So traffic congestion, school district issues et al ... could be a limiting factor to future growth
    Brett Hoover from Smyrna, Georgia
    Replied 3 months ago
    Great article @jaychage I love the debt coverage explained. How did you come up with 1.4% being a good number for debt coverage?
    Jay Chang Developer from Los Angeles, CA
    Replied 3 months ago
    DCR 1.4 is the number that most banks use for underwriting, so you don't want to go below this number. In most scenarious, your DCR should be much higher than 1.4, because the LTV or LTC is usually your main factor!
    Crystal An Rental Property Investor from San Jose, CA
    Replied 3 months ago
    Hi Jay, Thanks for your thoughts on this. I like that you gave data points and encourage the use of data to back any claims. I'm wondering what data source you recommend for investors to calculate absorption rates (sales/total available listings). Realtor.com does not have data on sales, and Zillow data quality isn't great from my experience. Would appreciate any guidance you have here. Thank you, Crystal
    Jay Chang Developer from Los Angeles, CA
    Replied 3 months ago
    Huduser.gov and Colliers International both have some great MSA studies that you can use to calculate absorption rates! These two are free. If you want more sophisticated info, CoStar is a great one, but it costs money. Good luck!
    Crystal An Rental Property Investor from San Jose, CA
    Replied 3 months ago
    Thank you Jay :)
    Ed Smith
    Replied 3 months ago
    So the biggest problem I have with this theory is that we we need more supply. If you look at the average house hold income, they can’t afford to rent, let alone buy. They are living with others just to make ends meet. I made 70k a year when I was 21 yrs old. That was 23 years ago. Now I have to make $130k JUST TO EQUAL that. And that’s with all them years of management experience. My opinion, it’s going to crash faster and harder then it did before. If you go back and look why the 1939 crash took place, you will find out the laws that they changed so that wouldn’t happen again were actually reversed.
    Vaughn K. from Seattle, WA
    Replied 3 months ago
    The thing you're missing Ed is that the reason they can't buy is because the cost of housing is over inflated, due to lack of supply!

    If housing had only gone up along with inflation, or a slightly more modest inflation adjusted increase, millions more people WOULD be able to afford to buy!

    A mistake that a lot of people in general, but especially in RE, make is thinking that HIGH housing prices are a good thing... The truth is society would be waaaaaaay better off if housing was dramatically less expensive! Housing is an expense that takes away from being able to buy other things.

    Imagine a world where it only cost $10K to build a 3,000 square foot house... How awesome would that be? People would have a couple hundred thousand extra dollars to spend on other things, like cars, clothes, massages, dinners out, etc. In other words their REAL standard of living would be far higher. That's a good thing! The fact that you can buy a computer with 100x the processing power, for dramatically less money, than you could a couple decades ago didn't make anybody poorer or worse off, it made everybody better off.

    The $10K house is an extreme example, but the logic applies no matter the dollar value. If we could build ourselves into a $200K average price, vs $250K, that means a bunch more money to spend on other things. In short having a glut of housing is better for the country overall than having a shortage, and the more prices get suppressed the better. Current RE investors might not be stoked, but it would be good for the economy overall.
    Jay Chang Developer from Los Angeles, CA
    Replied 3 months ago
    Yes we need more supply, so the average people can afford to rent and buy! Are you suggesting that the shortage of housing is ACTUALLY causing people to pay more for the cost of living, which will inevitable lead to a harder crash when people can no longer afford the rents?
    Joe Harrell from Los Angeles
    Replied 3 months ago
    Great new info here for me about how to look at a market and assess it investing health.
    Valerie Cudnik
    Replied 3 months ago
    I take anything that uses national averages with a grain of salt. California and New York are extremes and the volume skews the results. California is definitely in a bubble and is set for a correction. Areas where I live recovered from the last crash pretty quick, because it wasn't nearly as bad here... our bubble was smaller. Homes are affordable. The area I live in is also home to over a dozen military bases... and that means we've got a constant supply of people with stable employment (and housing allowances) who rent because they likely won't be here long enough to make buying a smart move.
    Tushar P.
    Replied 3 months ago
    Basically you are saying that in the long run stock market will give better returns than real estate... not surprising but most people on BiggerPockets don’t understand that...
    Jay Chang Developer from Los Angeles, CA
    Replied 3 months ago
    That's not what I'm saying. In fact, I think real estate is much more lucrative than the stock market. Generally speaking, stock market gains 6-8 percent YoY on average, but a good real estate deal can average 15 percent or more YoY upon sale! However, it's a good strategy to diversify your portfolio. Maybe even consider buying stocks and real estate internationally!
    Vaughn K. from Seattle, WA
    Replied 3 months ago
    Not if you have any clue what you're doing... With even standard 20-25% down your real returns on RE will almost certainly outpace stock market gains. Leverage is easier and safer in RE, and that's what makes RE returns awesome.
    Brianca King
    Replied 3 months ago
    I appreciate your analysis and point of view but I always cringe a little when any recession analysis is done and it doesn't include the fact wages are stagnant and haven't gone up, too many Americans are spending more than 30% of their income on housing(making them cost burdened), and the previous recession was partly caused by predatory lenders giving home loans to people who actually couldn't afford them.
    Vaughn K. from Seattle, WA
    Replied 3 months ago
    No matter how you slice it, the economy is not nearly as well off as many people like to pretend it is. Wages are a thing.

    Also, the fact that labor force participation rates are still down dramatically since the great recession. If we had the same labor force participation rate we did in 2006 or whatever, we'd have 15 million more people to employ. THAT is the reason wages aren't going up much. Those people are slowly being tempted back into work, essentially putting the brakes on wage increases to a large degree. Another way to think about that is the fact that our permanent unemployment rate has really risen another couple percent since the recession, and never recovered. So our real unemployment rate is more like 7-8%+.

    All those people not working are being supported by somebody... Whether it's taxpayers because they're on welfare of some sort, a spouse, parents, etc. They're using resources, but not contributing to producing things or paying taxes in. It's not a good thing. Hopefully it continues to creep upwards, but it'll be a long time before we get back to the numbers we had before the recession... If we ever do.
    Matt Kell
    Replied 3 months ago
    1. Yes, in some major cities we are seeing another housing bubble. Research numbers tell us this. Home prices have had significant growth and continues to outperform economic growth. 2. The S&P should have doubled. The real estate values should not. The rule of 72 with respect to stock market. 3. The S&P doesn't factor inflation. Wrong. The S&P factors into effective rates with market risk premiums where inflation plays a role. Effective rate plus inflation rate equals nominal rates. Indeed inflation plays a role in our financial decisions because this plays a role in determining our required rates of return, cost of capital, discounts rates. 4. Pre-recession housing with new construction. There is a labor shortage in this sector, therefore the housing starts will be less. What really is going on is you can build a new home with todays interest rates rather than buy existing at these prices. Evidence clearly shows us this since the 1970's of the business cycles. We keep going back and forth. 5. As far a corporate debt levels, with the cost of capital so low, corporations will enhance their operating leverage and take on more debt. These debt levels are NOT high at all. In fact, based on the current business cycle, corporations have deleveraged quite a bit since the recession of 2007 and we are no where close. Economic factors are priced into the stock prices and should economic factors change, stock prices will change too. 6. The stagnant building level growth is not from dcr and ltv nor cautious mindsets. There is ample capital in the markets and very accessible. The housing shortfall is the labor shortfall. Construction people want to build more homes, but they are limited in their ability to build with lack of labor. 7. As far as return on equity is concerned, how do you measure that and what are you comparing ? I could buy a house and tell you that I have a huge ROE and hahaha I'm beating the S&P 500. Reality is when I have to put more money into the real estate investment, then where is my ROE? Not so hot now is it? If everyone's ROE was high, then everyone should be entering the market and stripping those returns away. Economics 101
    Vaughn K. from Seattle, WA
    Replied 3 months ago
    Everybody always says lack of labor... My response to that is:

    1. Labor force participation rate is FAR lower than pre recession... There are millions of people there to be tapped if they can be tempted back into work... So how to do it???
    2. Raise wages. If there aren't enough people willing to work at X, then pay them X*1.2, and magically more people will be willing to work!

    The wages thing seems to be a problem a lot of industries are having... They have become used to some of the lowest wages this nation has seen in MANY decades in inflation adjusted terms, and now are apparently willing to miss out on generating more revenue because they're afraid to raise wages so they can get more work done. People need to stop being so afraid of this, and just raise the wages, get the jobs done, and it'll all sort itself out. Thanks mostly to the influx of 10 million + illegal immigrants, construction wages now are far lower in inflation adjusted terms than they were a couple decades ago. Nominal wages in construction have almost not moved in 20+ years, but we've had 20+ years of inflation in there! I bet if people were paying wages like they did in the 80s and 90s adjusted for inflation they'd have little trouble finding workers.

    Bear in mind, I'm no social justice warrior commie... But that's how markets work. If you need more workers, offer higher wages and they will magically appear.
    Justin Pierce Rental Property Investor from Woodbridge, VA
    Replied 3 months ago
    Great Article, Jay. What resources do you use to get your market data? I'm shopping for that right now. I've looked into things like costar and reonomy. Do you have a recommendation on a one-stop shop for things like population density, household incomes, absorption rates, etc? You make a good point here in this article and data is king. General national trends are of little value. I'm very concerned with the numbers in most of our major markets. But there are a lot of absolutely fantastic submarkets or Tier II markets. I think there is a lot of opportunity in a lot of these smaller cities and technology is driving it. Companies no longer have to put 20,000 employees in New York, DC, San Fran, LA. They can put a 100 person Executive team at the flag pole and put a huge portion of their work force in Cities like Salt Lake, Boise, Richmond, etc. They can pay them 25% less and the employee's money will go 50% further. Win, win, win!
    Jay Chang Developer from Los Angeles, CA
    Replied 3 months ago
    Thanks Justin. You can find reliable data on Huduser.gov and Colliers. They both provide valuable MSA, which includes household incomes and absorption rates. I'd try googling for population density. I don't have a source for that, but you can try city-data and DataUSA. Good luck!
    Louis D. Contractor from 95660
    Replied 3 months ago
    I'm not sure we are over building. Baby boomer will be "crossing over" at an accelerated rate. Millenials have a fertility rate of 1.78 and replacement rate is 2.1 We have 700,000 less children per year then the government anticipated. As baby boomer die off at a faster rate that too will create more available housing. I for one am eating better and going to the gym so I can stick around and watch!
    Louis D. Contractor from 95660
    Replied 3 months ago
    ( I undated my post as I did not know how to do an edit). I'm not sure we are over building or under building. Maybe builder have it right. Baby boomer will be "crossing over" at an accelerated rate. Millennials have a fertility rate of 1.78 and replacement rate is 2.1 We have 700,000 less children per year then the government anticipated. As baby boomer die off at a faster rate that too will create more available housing. I for one am eating better and going to the gym so I can stick around and watch!
    Dan Naumowicz Real Estate Agent from Elk Grove Village, IL
    Replied 3 months ago
    No such thing as overbuilding especially in the urban areas with so many living in dilapidated homes or homeless. The problem is with overtaxing. Government is overgrowing.