If you assume that the sale of a new home (not a resale home) represents a new household formation, you can see the difference in hew household formation on his graph. New household formation rate is way down from the peak. Even down from well before the peak.[/quote]
sdduuuude, McBride’s graph is for SAAR (Scottsdale [AZ] Assn of Realtors), no?
Has there been more building going on in metro Phoenix in recent years than SD County? From his graph, it looks as though there has been.
I can’t understand that since the Phoenix metro area is grossly overbuilt.
We should never assume that the sale of a new home represents a “new household formation.”
Unless homebuyers move in from out of (SD) county OR, if local, a parent’s back bdrm directly into a local rental home or brand new home community in SD County, there is no “new household formation,” IMO.
If “local” homebuyers move out of a local rental into a brand new home OR resale home which they purchased, they have displaced the rental they were occupying.
In several coastal CA counties, there isn’t any (and hasn’t been for many years) “new home tracts.” So, unless homebuyers in these counties are moving out of local parents’ back bdrms into an existing home which they are renting or have purchased, there is no new household formation.
New buyers/tenants in existing homes are simply replacing the most recent household which occupied the unit. If an existing property is sold or rented and the owner/previous owner then leaves the county, then that is actually a “negative household formation” if the new occupant is moving from another local property.
I really think the term “new-household formation” needs clarifying because “Big Development” and CAR/NAR like to use this phrase to “justify” why CA needs more and more new residential construction.
If there weren’t any new construction for the next 20++ years in CA’s job centers, there will still be plenty of places to live within close proximity to those jobs.
To maintain and increase profits, “Big Development” uses the mantra of “CA is running out of housing” to pander to their “captive audience,” the “lizardland-lifestyle seekers.”
