New construction at record low, nominal prices hit new high

[gzz]

I took the bus when I worked in Europe. It was much cheaper than cars, which cost about 75% more due to taxes and regs than the USA, with gas about twice the price.

My boss let me use his older car, but commuting with a boat sized E Class wagon in a old Euro city was dangerous, so I kept it for intercity travel.

[The-Shoveler]

[quote=FlyerInHi][quote=The-Shoveler]The only place where I found public transplantation cheaper than driving was in Asia, But that was likely because it was very heavily subsidized.
[/quote]

My prediction is that, in the future, high paying professional jobs won’t be in business parks surrounded by houses, but in dense urban city centres. As it is now, the top tier people want to be in top tier cities, which explains the cost of housing in those areas.[/quote]

It was still a PITA carrying stuff and walking miles to get anywhere in Shanghai LOL.

I really don’t think that is in SoCal’s DNA,

I think SoCal will do what it has done for the last 100 years, (make outlying suburbs into big cities).

Just look at Carlsbad, even that is spilling over into Oceanside.

[FlyerInHi]

[quote=The-Shoveler]

I think SoCal will do what it has done for the last 100 years, (make outlying suburbs into big cities).

Just look at Carlsbad, even that is spilling over into Oceanside.[/quote]

I agree somewhat because people are drawn to California.

We will see where the jobs are there in the future. But I worry less about California than other second tier American cities.

I would bet on big cities centers, especially if you need to change jobs. Despite telecommuting, you need to be near the decision makers.

[FlyerInHi]

here’s more on the companion units.
The new rules will be adopted this summer.. but who knows.

Maybe a good time to build a granny flat next year.

http://www.sandiegouniontribune.com/news/politics/sd-me-granny-flats-20170525-story.html

[bewildering]

[quote=FlyerInHi][quote=The-Shoveler]The only place where I found public transplantation cheaper than driving was in Asia, But that was likely because it was very heavily subsidized.
[/quote]

There you go. Is it any surprise that Asia is catching up to us very fast? look at their urban development.

Right now, public transport in USA means suffering because of delays, unreliable schedules and not being able to go where you wish.

China already has a second generation high speed train between Beijing and Shanghai. Those train companies are now sized on the order of Boeing in jobs and potential exports.
[/quote]

“The China Railway Corporation, the state-owned operator of the train system, has debts of more than 4trn yuan, equal to about 6% of GDP.”

The equivalent 6% in the USA woud be 1 trillion dollars. The majority of their high speed lines are running at a loss.

Surburbia is popular with families. I do not see that ever changing. You have more freedom with a SFH (and using a car). Living in an apartment means depending on having responsible neighbors or having onerous rules. In Germany, in my apartment, I was not allowed to flush my toilet after 10 pm.

[FlyerInHi]

Bewildering, sure there’s a place for SFRs.

However, the reality is that the marketplace is not working. The current regulations make building high density very, very hard.
Why not let the free market work? If somehow landowners could merge and upzone their lots, they could build or sell, take the money and move elsewhere to their liking. Let the free market work to supply housing. The consumer can decide if he wants an apartment with no parking. If apartments/condos are so bad then there will be few customers.

[FlyerInHi]

[quote=bewildering]

In Germany, in my apartment, I was not allowed to flush my toilet after 10 pm.[/quote]

Cheap construction that doesn’t have much insulation between units.

The old stick built wood buildings under 5 stories are crap. With economy of scale and building technology improvements, we can have great apartments.

The narrative is that people moved away from the cities in the 50s to escape the tenement housing. Only recently are young people moving back. Suburbia is where people grew up and that’s all they know. A comfortable urban alternative has not yet developed. But it’s coming.

There is a hybrid between urban and suburban developing. The UTC area for example. Or the Irvine Spectrum area. Or Playa Vista in LA.

[lifeizfunhuh]

But see

http://www.zerohedge.com/news/2017-07-23/record-apartment-building-boom-meets-reality-first-cre-decline-great-recession

I live in 92101, and the current supply of pending buildings is astonishing. Is anyone concerned about this? I recall huge new inventory coming on line in 2005-2007 as well.

[gzz]

Lifeiz,

New construction in San Diego seems to be very weighted toward luxury 2 bedrooms for $2400+.

That could slow rent growth just in that submarket. But overall construction is simply the lowest in modern San Diego records while the economy and population keep growing.

Even in that submarket, such places are popular with people moving here, students, retirees, and asian investment buyers.

If you think there is a lot of construction downtown now you don’t remember 2004-2008.

[sdduuuude]

Interesting data. Thing is, all the sub-contractors I am talking to are super-busy right now and some of the quotes I am getting for framers are incredibly high. Not sure how to reconcile that fact w/ the article.

[gzz]

Framers can do other work than brand new construction. Renovation is very hot. In a way that feeds demand for housing.

[Author]

Posts