Thursday, January 19, 2012

Housing: Record Low Total Completions in 2011

by Bill McBride on 1/19/2012 12:22:00 PM

A few key points for 2011:
• There were a record low number of total completions.
• There were a record low number of single family completions.
• There were a record low number of housing units added to the housing stock, and this suggests the excess vacant inventory declined significantly.
• Multifamily starts were up 60%. This will probably increase further in 2012.
• Single family starts were down 9% to a new record low. This looks to rebound in 2012.

Multifamily starts were up 60% in 2011 over 2010 - from 104,300 in 2010 to 167,400 in 2011. This will probably increase further in 2012 since 167 thousand is still a fairly low level of starts. Single family starts were down 9% in 2011 to 428,600. This is the lowest level of single family starts since the Census Bureau started tracking starts in 1959!

Since it typically takes over a year to complete a multifamily building, and since multifamily starts were are record lows in 2009 (and close in 2010), there were a near record low number of multifamily completions in 2011.

The following graph shows the lag between multi-family starts and completions using a 12 month rolling total. The blue line is for multifamily starts and the red line is for multifamily completions.

Multifamily Starts and completions Click on graph for larger image.

The rolling 12 month total for starts (blue line) increased all year. Multifamily starts were at 167.4 thousand units in 2011.

Completions (red line) appear to have bottomed. This is probably because builders rushed some projects to completion because of the strong demand for rental units. Multifamily completions were at 130.5 thousand in 2011, just above the record low of 127.1 thousand in 1993.

Total completions were at a record low in 2011 (as were single family completions), and the U.S. added the fewest net housing units to the housing stock since the Census Bureau started tracking completions in the '60s.

Below is a table of net housing units added to the housing stock since 1990. Note: Demolitions / scrappage estimated.

This means that the overhang of excess inventory probably declined significantly in 2011.

Housing Units added to Stock (000s)
1 to 4 Units5+ UnitsManufactured HomesSub-TotalDemolitions / ScrappageTotal added to Stock
19901010.8297.3188.31496.42001296.4
1991874.4216.6170.91261.92001061.9
1992999.7158210.51368.22001168.2
19931065.7127.1254.31447.12001247.1
19941192.1154.9303.91650.92001450.9
19951100.2212.4339.91652.52001452.5
19961161.6251.3363.31776.22001576.2
19971153.4247.1353.71754.22001554.2
19981200.3273.9373.11847.32001647.3
19991305.6299.3348.119532001753
20001269.1304.7250.41824.22001624.2
20011289.8281193.11763.92001563.9
20021360.1288.2168.51816.82001616.8
20031417.8260.8130.81809.42001609.4
20041555286.9130.71972.62001772.6
20051673.4258146.82078.22001878.2
20061695.3284.2117.32096.82001896.8
20071249.825395.71598.52001398.5
2008842.5277.281.91201.62001001.6
2009534.6259.849.8844.2150694.2
2010505.2146.550701.7150551.7
2011453.5130.546630150480