Housing: sense of scale

Consider this quote: “about 320,000 foreclosures – or repossessions – were begun in each of the first two quarters of 2007 he said, against an average of 225,000 per quarter in the past six years.” What are we to make of that? Some easy calculations: thats up 92 thousand per quarter or 42%; or from .9M/year to 1.28M/year.

To do more we need some other numbers.

In 2000 (pdf), there were 115 million housing units, and 105 of those were owner occupied. So 1.28M/year is about 1% of the total installed base of housing.

But it’s is probably better to look at the housing market flows, not the housing installed base: 6.4 millions homes were sold in 2006 in the US; so that 1.28M is 20% of that, up from 14% of home sales over the last 6 years. We can also look at inventories; and I find those numbers interesting. In 2004 there were 2.3 million houses on the market and in July 2007 there were 4.6 million. Makes for interesting times in the housing markets.

Of course this effects real people, displacing them from their homes. That 1.28M/year is a lot households displaced. Unemployment is another significant displacing event for households; a 1% shift in that rate effects 1.5 million people; over the last 16 years the typical year to year swing in that rate has been .55% so this 2-3 times that. It’s rude comparison, but you can compare this to international displaced people counts. I wonder how many people were displaced by Katrina?

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