Will Housing be "the Biggest Business Story of the next 5 Years"?

[Spencer Clark]

The Washington Post published an article from an outside contributor (and investor), Conor Sen, claiming that while software was the biggest business story of the last five years, housing will rule the next five years. I'm curious what fellow real estate investors think, and how that would impact us specifically.

To summarize his assumptions:

• The US economy is constrained in labor & capital.
• There will be growing demand for new housing (esp. SFH), of which there hasn't been much new supply since the financial crisis.
•  There is a shortage of construction workers needed to fill future construction demand, and significant obstacles to expanding the supply of potential workers.

He thus predicts:

• Construction wages will rise due to competition for scarce talent, stealing workers from other blue-collar industries.
• Workers will continue to flee the rust belt to the Southeast and Coasts where construction jobs will be.
• Since immigration laws will impede importing labor, sectors like agriculture and manufacturing will continue to move overseas.
• Other sectors will also hurt as rising costs for construction crowd out consumption. Capital will increasingly flow to the housing sector, crowding out investment in other fields.

In short: "Housing is set to eat the U.S. economy."

Do you agree with this outlook? What risks and opportunities do you see for investors in the next five years (whether or not you agree)?