I appreciate that you're trying to strike an optimistic tone, given that we're looking at a minimum of four years of erratic governance at the Federal level. I'm also glad that you're keeping a close eye on the single family build-to-rent market because it might be a critical source of supply for the years to come. Every time I look at the FRED chart of multi-unit starts I feel a sense of frustration at what seems to be a production ceiling of 400,000 units a year. The complexity of planning and building large scale buildings seems to have created a market where production is capped by a market consensus that is probably a few hundred thousand units short of demand capacity. Thus, all demand shortfall has to be met by higher production in the single-family market, which in the most charitable scenario, is running at least 300,000 units short of annual demand capacity to make up for the Great Recession backlog.
I don't see single family build-to-rent making up that shortfall in this decade. Even if production in that niche expands considerably I wager it will never exceed 150,000 units a year, where it will be capped by a limit on cash capable investors.
I appreciate that you're trying to strike an optimistic tone, given that we're looking at a minimum of four years of erratic governance at the Federal level. I'm also glad that you're keeping a close eye on the single family build-to-rent market because it might be a critical source of supply for the years to come. Every time I look at the FRED chart of multi-unit starts I feel a sense of frustration at what seems to be a production ceiling of 400,000 units a year. The complexity of planning and building large scale buildings seems to have created a market where production is capped by a market consensus that is probably a few hundred thousand units short of demand capacity. Thus, all demand shortfall has to be met by higher production in the single-family market, which in the most charitable scenario, is running at least 300,000 units short of annual demand capacity to make up for the Great Recession backlog.
I don't see single family build-to-rent making up that shortfall in this decade. Even if production in that niche expands considerably I wager it will never exceed 150,000 units a year, where it will be capped by a limit on cash capable investors.
I expected to write a negative post, but the data keeps pointing to good trend shifts!