"In a quarterly conference call after the company's earnings, Miller laid out the two biggest underlying reasons for the current shortage in housing supply that is causing the price of houses to soar.
"Land and labor shortages will continue to constrain supply and constrain the ability to quickly respond to growing demand while the mortgage market will continue to constrain purchaser's access to mortgages," said Miller on Tuesday.
As we've noted before, consumer credit has held back potential homeowners, and home builders have faced a serious labor shortage.
Miller, however, does make an interesting distinction. It's not that only home builders are having trouble building houses, but the cost to find somewhere to put them has spiked."
The article goes on to say:
"Between the third quarter of 2011 and the third quarter of 2015, the average value of structures has increased 12.8%, whereas the value of the land the structures are on has jumped 58.6%.
" Source.
That is a lot of percent!
I just wrote about this in Housing is about to get melt your face off expensive in the Bay Area. If the economy were to ever take off again, (and I think it will soon) this will cause the kind of sharp inflation that will bring out the pitchforks. Building has never been this depressed for this long. As I've said a million times - the normal cycle is about three years. This cycle is almost 2 times that. About eight years.
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