First, I should clarify a point I made in a previous post. This is a bit in the weeds and probably more of a nerd-out about the particulars of my model than most readers want to bother with. So I am indenting the part that most of you will want to skip.
I'm saddened to hear that DC is in the closed access city list, and a little surprised, but it makes sense on a metro-area level. DC proper is building relatively well compared to the rest of the closed access cities, but the suburbs really haven't been building much. DC has quite a few disinvested neighborhoods (that to begin with weren't single-family zoned) where it was politically feasible to allow new housing construction. The suburbs are mainly single-family zoned and thus highly resistant to new construction.
So Warren Buffett has decided that D.R. Horton and Lennar are good investments. I wonder if he's reading this blog. He will no live to see the full returns on their stock, but I hope his shareholders are appreciative and stay forward looking.
I'm saddened to hear that DC is in the closed access city list, and a little surprised, but it makes sense on a metro-area level. DC proper is building relatively well compared to the rest of the closed access cities, but the suburbs really haven't been building much. DC has quite a few disinvested neighborhoods (that to begin with weren't single-family zoned) where it was politically feasible to allow new housing construction. The suburbs are mainly single-family zoned and thus highly resistant to new construction.
Northern Virginia is seeing a population decline, with a LOT of telecommuting people moving to the far exurbs or out of the MSA altogether. See https://cardinalnews.org/2024/09/04/northern-virginia-is-losing-population-why-thats-a-problem-for-the-whole-state/ referencing census data
That is probably at least part of why they are building less in the close in suburbs.
If home prices are elevated, even after population decline, then supply constraints caused by things like zoning must be especially bad.
So Warren Buffett has decided that D.R. Horton and Lennar are good investments. I wonder if he's reading this blog. He will no live to see the full returns on their stock, but I hope his shareholders are appreciative and stay forward looking.
Front running the Oracle over here.🤫