World Stimulus Package: US To House Entire Population of 68 Nations
Last week (and today) saw more housing statistics released and the typical bull-bear spin that follows.
One example that caught my eye was the following blog post that was featured on many financial sites:
"According to the latest data, the number of vacant U.S. homes touched 18.7-million in the second quarter. That is a daunting figure, of course, but it is more fun to put it in context. Assuming four people per household, the U.S. currently has enough surplus housing to put the entire population of the U.K., with room left over for Israel."
Put another way, assuming that same four person per household number and 18.7 million vacant homes, the US could house the 68 smallest countries, from Vatican City to Liberia.
I'll admit, when I first saw that quote I proceeded to IM half my contacts, proudly spouting out the statistic and basking in the "Ah Shucks! What a statistic!" replies that followed.
But then I decided to dig around a little bit and realized how thoroughly unimpressive the figure actually was. For one, the number of vacant homes last year stood at a largely unchanged 18.6 million.
A second factor that makes the figure unimpressive is that the US has a population of roughly 307 million and 130.8 million homes. Meaning that on average there's 2.34 people for every home, not the four figure that was cited in the original blog post.
Applying 2.34 people per house and multiplying it by 18.7 million vacant homes yields about enough housing for about 44 million people. Enough to hose the 58 smallest countries, still impressive, but again -- largely the same as a year ago.
People tend to get hung up on headlines when forming opinions on broad economic events. Yet, a little cursory digging often shows this to be nothing more than sensationalism. Not to say the 18.7 number isn't dissapointing, you'd hope all the foreclosure sales and declining prices would be decreasing the number of vacant homes rather than leaving them flat under such depressed conditions.
However, to me it's another lesson of lies, damn lies, and statistics. Especially with housing, it's easy to get caught up with the daily numbers being released -- New Homes Sales Up 11% in June, the recession is over!!! Oh, wait, that's within the +/- 13.2% margin of error -- but the there's so many complex factors in play that the month to month numbers mean little. In addition the recession's struck so deep that there's many other factors that play an equal footing in compared to residential real estate in establishing an economic recovery.
So tune out the day-to-day news on the economy and dig a little deeper on the data. Splashy headlines alone won't show if we're falling deeper into or moving out of the recession.