A Unique View of Housing and the US Economy
Monthly tracking using a unique model of supply vs demand and secular vs cyclical home price trends in the US and within each of the largest metropolitan areas
Data-driven analysis of US economic and housing trends
A subscription to the Erdmann Housing Tracker is an invaluable tool for anyone with exposure to housing market valuations or macroeconomic fluctuations: Real estate investors, portfolio managers, hedge fund managers, and anyone making discretionary decisions whose success depends on real estate valuations. My model will provide you with detailed estimates of the sensitivity of local home values to macro conditions that reflects the effect of supply conditions in a way that no other model does.
All paid subscribers will have full access to posts and discussions. Subscribers will also receive monthly updates of home price sensitivities to supply conditions and to cyclical changes. (Are prices being driven higher by a lack of supply and rising rents or by short term buyer demand? And, should we expect prices to decline?)
Monthly subscribers ($12/month or $100/year) will receive a monthly estimate of national home price trends and sensitivities.
Full Founding Members ($300/year) will receive the monthly national report and the report on major national metropolitan areas.
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I have developed a conceptually powerful and novel approach to understand American housing markets based on a new empirical review of the housing bubble and bust of the 2000s. In early 2015, I began to research the housing market to make some personal asset allocation decisions. My intention was to estimate the scale of the market upheavals before 2008 and the reversals of those upheavals after 2008. I became increasingly shocked and fascinated that on point after point, not only was the conventional wisdom about the scale of those events wrong, but the entire premise was wrong.
A lack of adequate housing rather than a surplus was the more appropriate way to understand what happened. And the post-2008 market was mostly not a reversal of a bubble, but was instead an imposition of misguided attempts at solving the wrong problems that made the real problem - a lack of adequate housing supply - worse. Increasingly, as the supply problem worsens, many are coming to appreciate the lack of adequate supply in American housing markets. I have developed a unique understanding of that problem that reaches back into the pre-Great Recession period to better inform us about the state of housing markets today.
I have authored two books:
Shut Out: How A Housing Shortage Caused the Great Recession and Crippled Our Economy This was a deep dive into the many ways in which the conventional wisdom on the state of housing and the American economy is wrong, and how a lack of adequate housing is hurting Americans economically.
Building from the Ground Up: Reclaiming the American Housing Boom This book is a narrative of the housing boom and the Great Recession, tracking the series of events that led to crisis, and the ways that mistaken policy decisions led to an unnecessary crisis.
Along the way, I spent some time as a Visiting Fellow at the Mercatus Center. You can find many extensions of my research there.
What They’re Saying
Reviews of “Shut Out”:
“Kevin Erdmann… has two main messages. The first, which is not controversial among economists, is that restrictions on residential construction in coastal California and the urban Northeast have constrained supply so much that housing in those areas is virtually unaffordable for people in the lower- and middle-income classes. His other message is more controversial, that the financial crisis last decade was not due to a housing bubble but, rather, to bad policy decisions based on the idea that there had been a bubble. Whereas I was already convinced of his first point, I, like the majority of economists, was skeptical of his second. But because of all the data and reasoning he brings to the issue, I now find myself at least 90% convinced.” -- David Henderson for CATO
“Shut Out is a particular challenge to some of the scholarship on the crisis that, to date, had been the most authoritative, namely the finding by the University of Chicago economist Amir Sufi and the Princeton economist Atif Mian that loose or even fraudulent lending tempted people into buying homes they couldn’t afford, leading to disaster when home prices fell.
Erdmann doesn’t assert that their meticulous research is wrong, but rather that their interpretation of the data is off… Asked about Erdmann’s interpretation, Sufi said that the argument was ‘interesting’ but that he didn’t have the time to comment further. Mian declined to comment.” — Joseph Lawler, The Washington Examiner
But what if this fall in prices were not the inevitable bursting of a bubble, but an unnecessary and self-inflicted panic? This is Kevin Erdmann's contention. . . This is a provocative thesis, not to be accepted lightly. Yet Erdmann has assembled a formidable battery of data and argument to support it.. . . It is the detailed documentation of the (housing bust), and the treatment of the entire episode as a panic rather than a bubble, that is Shut Out's key contribution relative to the academic literature. — Declan Trott, economist with Australia's Department of the Treasury, for the Economic Record, a journal of the Economic Society of Australia
About “Building from the Ground Up”:
“Erdmann’s contemporaries may bristle at his provocative ideas, but like many of the best challengers of conventional wisdom, I expect he will be vindicated in the long run.” -- Alan Cole, Full Stack Economics, former Senior Economist at the US Congress Joint Economic Committee
National Review: How the Fed Should Be Helping Housing
The Bridge: US Data on Housing Starts Can Be Misleading
The Bridge: A New Wrinkle in the Housing Market
Politico: How Mortgages Can Ease the Downturn
National Review: The Unbuildable American Home
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