AccuriZ

How does one create additional supply when the population is not growing? 

The answer was to lower the ownership standards and permit those who could not afford home ownership the ability to do so with No-doc, No Asset verification loans.   Home ownership is based on decades of proven lending standards since the Great Depression.  So, did we lower standards to meet demand or were standards lowered to create demand?  In either case, the result is the same:

Did analysts conclude that a loan made to an unqualified buyer at a lower loan amount would be offset by a quality loan from a qualified owner?   Did 3.5 million new home buyers in the market cause a “bubble”?  Did developers, who needed new home buyers to stimulate the housing market ignore supply and demand factors out of greed or just bad analysis?  And finally were new communities in warmer climates, notably Florida developed to attract  those preparing  for retirement or did an influx in migration cause development?

According to public records and property data, there is no less than 4 million excess residential units in the United States, of this over 70% are single family properties.  Given current population growth estimates and natural building activity needs, an absorption cycle of no less than three years will be needed before the housing industry experiences a significant increase in housing starts and achieves development of over 1 million units per annum.