I borrowed his graph, and eyeballed in the yellow "Danger, Will Robinson" line. Whenever starts/cap go above it, it's a bubble that will crash as soon as it hits the top trend line.
Mark's comment on my earlier post suggests uncertainty in how to characterize the trend in the first graph there. Is it linear? Exponential? Actually, I think it's a mess. It's reproduced below with some trend lines to consider. I forced a polynomial curve through the pink points by cherry picking them from the entire data set. It's the curved pink line line below, and looks fairly respectable, considering it's heritage. OTOH, so does the straight pink line, through those same points. Of course, neither looks good for the whole set. Hence the straight blue line, which is the best fit for the entire data set
It's hard for me to rationalize why this growth curve would be exponential, even without aberrations. Population growth is exponential, but the bank of already built homes takes care of the bulk of that potential demand. All you really need is enough new homes to satisfy the demand caused by first time home-owners + replacement of dwellings that are no longer useful. A fairly straight line with a modest upward slope ought to be adequate.
We were above the blue trend line that I favor for a decade, and far above it for at least 5 years. The glut of existing homes, with many foreclosures still to be executed, combined with the personal debt overhang and continuing dismal economic outlook is going to keep construction depressed for a long, long time.
.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/tny_au_xx_usoz_4.gif)
5 comments:
It's hard to see strong trends in a graph like your 'Single Unit Home Constructions (thousands)'. I agree with you: it's a mess.
There are multiple trends in the real world: population increasing. Capacity Utilization declining. Turbulence. Inflation. Panic. Likely there are multiple trends in your graph as well.
Perhaps when the logic that drives housing is not 'to live' but 'to flip', there is no rational behavior to see. Or at least the rationale is different than we might expect.
If you compare my graph and Mark's there are actually some similarities. Despite the wildly different shapes and contours, the extreme tops and bottoms line up. What they indicate are housing bubbles, of various intensity, at the tops, and recessions, of various intensity, at the bottoms.
Forget the shapes, and examine the extremes.
It's pretty much the business cycle.
Cheers!
JzB
Thanks for the link. I don't have much to add.
It is difficult to find order in chaos.
If the Contractor does not arrange estimation by the date requested, you should be warned that maybe they are not well-organized or dependable.
Home Construction
jordans
yeezy shoes
yeezy
hermes birkin
goyard handbags
longchamp
nike huarache
christian louboutin outlet
balenciaga shoes
christian louboutin shoes
Post a Comment