"Single family units have declined most rapidly, while the construction of multifamily units has fallen more modestly." - No surprise here. Places like Phoenix and Orlando are loaded with new subdivisions that have vast numbers of empty homes in foreclosure and new residential development has generally come to a screeching halt.

"The number of new high-density residential units has not declined from the 200,000 units per year level produced at the height of the real estate boom." - This is because developers found out long ago that building "high-end" "upscale" apartments with reasonable rent prices is a great strategy; they can always convert to condos & kick out the lower income tenants when/if the market is right. Here in Orlando, new apartment complexes continue to be built.

"Construction of rental units is actually up slightly in 2007, while condos have declined at a rate similar to single-family detached units." - Again, no surprise. People with the ARM's who have foreclosed either went back south of the border or went into rentals for the most part, which has maintained the demand.

As a developer of real estate I find this article seriously lacking insight, and it is too early for serious analysis of how the economic turmoil will affect future housing constuction patterns.

I do suspect that the current economy will dramaticaly reshape how things are done, as major economic events always do. But it is very hard to pull out the crystal ball just yet and determine exactly what these changes will be.

Single family construction will always react more quickly to changes in the economy than large multi-family developments. Big developments take several years of planning and permitting, and then consruction, so many of them are too far along to pull the plug. Wait another 12-15 months and you'll really know if big projects are stopped (they are, by the way).

There is a short-term boost in rentership as otherwise stable home buyers find it prudent to wait to buy. Will this be a permenent shift towards lower home ownership numbers? My guess is yes, but until we see the long-term numbers we won't know.

A lot also depends on how the economy performs over the next three years. If we begin a steady recovery sometime in 2010, then the the long-term home ownership changes should be less pronounced. But if the severe recession drags into 2011 or 2012, then we will certainly see a generation that is much more thrifty and saves more, as we saw after the great depression.

The other factor is oil prices. A longer recession means lower oil prices, so there is a negative feedback loop built into our financial decisions about whether to live in an urban setting or not. Poor economy and lack of jobs certainly pushed folks to the city core, but the corresponding low oil prices push buyers back out to the fringes.

It is indeed and interesting conversation, but right now we should only be asking questions. It is way to early to draw conclusions.

One thing that can push people out of the cities is food riots and civil unrest. It can get hairy fast when things go south.

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I, too, love the gridlocked traffic of urban areas. Yes, I, too, love it living in high crime/murder rate urban areas. Yep, I, too, love it that my urban neighbors will stand by watching while an innocent person is being beaten to a pulp. Uh, huh, I too, am filled with glee that urban children are forced to stay in failing schools. Who in their right mind would want to leave high crime, gridlocked traffic, failing schools, and uncivil neighbors?!?

Cities are the best!

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As long as people commute long distances 5 days per week, we will have imported oil problems. Telecommute, car pool, transit or whatever it takes can make a big difference.