You give great information - just discovered you last week. Thanks for all you do.
You wouldn't happen to have the month-on-month figures for Jan-Feb 05 and 06 on hand would you? I'm wondering where the 9 percent increase MoM this year falls relative to past years.
If starts had been below expectations, that would have been bullish too, as it would mean builders are on their way to reducing inventories. All news is good news once again.
I would appear that the same slime that was pushing and selling the toxic loans to investors are now the same slime that is buying it up on the real cheap. I hope that the sec goes after this slime.
ac, I can't see this report as anything but negative news for housing.
The story is completions ... and the coming loss of jobs. Why anyone thinks this is bullish is beyond me. The best thing for the homebuilders would be if starts fell to 1.2 million or so, then inventories would be coming down.
If you accept that real new home sales (after cancellations) are running at around 750k, and 33% of housing starts are for rental units, then at 1550k housing starts are still running about 300k too high. The housing industry still has to undergo a significant (15%?) further contraction just to hit a point where inventory isn't expanding, and probably more like 25% to deal with the inventory overhang, assuming sales stay at historically high levels. Oddly, I'm not hearing that spin on CNBC this morning.
Job loss is the key and since CR as educated us on the importance of the builders to the overall economy we can expect further stories like this one from thehousingbubbleblog this a.m.
Flaglers construction industry has lost about 150 jobs, slipping below 2,000, said Sharon Warriner, spokesman for the Workforce Development Board of Flagler and Volusia. More significant, she said, was a huge cutback in Flaglers real estate and mortgage industry, shrinking from nearly 2,000 workers in September 2005 to 532 the following summer.
There is a very interesting regional story in the data. All the strength in starts was in the West and South while the NE and MW continued to implode. Starts in the west were up 26.4% for the month, but still down 30.9% yr/yr. In the South starts were up 18.0% and down 20.3% yr/yr. However in the MW, starts were down 14.4% for the month and down 50.6% yr/yr while in the NE starts were down 29.7% for the month and 27.4% yr/yr (down more for month than year there is interesting). All regions are not equal. Dixie is far and away the most important and becoming more so, accounting for 54% of starts this month vs. less than 49% a year ago. The regional patterns for permits were simalar, but not as extreme. Clearly weather played some role in February's numbers, even seasonally adjusted as evidenced by the regional pattern.
Anyone notice the eerie similarity in the early 1970s starts trend with the current trend? Looks like we are just in that little headfake phase before the next major plummet.
Given that weather nationwide deteriorated from roughly normal in January to among the worst of recent Februarys, might completions have fallen partly because builders couldn't get them done, rather than because the inventory of uncompleted homes has been diminished? I have not argument with the notion that falling starts some time back have led to falling completions now, but the magnitude of the drop seems too big. Builders, like many other goods-makers, function most efficiently by smoothing things out, rather than by straining capacity one month only to lay off in the next. Note that homes under construction fell only 0.7% while completions fell 9.4%. If the weather allowed, I'd expect those to figures to be more similar.
KHarris: Completions follow a very definite seasonal pattern, with the high coming in December and the low in January. Until this year, not-seasonally adjusted coompletions had risen compared with January in every February since 1999. This probably isn't a weather effect; most likely it's that many fewer houses are in the pipeline to be completed. Single-family houses under construction are down a record 21% yoy in the South, a record 27% in the Midwest and a near-record 21% in the West. (Data set goes back to 1985)
I'm not an expert in building but as far I know completions are almost unaffected by the weather because the final part of the building process is indoors (flooring, tiling, painting, etc.)
THAT IS WHY IT IS VERY IMPORTANT TO COME UP WITH THE CORRECT ESTIMATE FOR THE FUNDAMENTAL DEMAND, AS IN DWELLINGS.
IF THE FUNDAMENTAL DEMAND IS 1.45M, AS MY CALCULATIONS SHOW, AND NOT 1.7M, AS YOU ESTIMATE, CONSTRUCTION, INCLUDING PERMITS, ETC., IS EITHER ABOVE OR BELOW THE DEMAND.
I claim that we are still continuing to add to the Vacant Units. The builders are NOT working off the inventory; they are building the inventory. These clueless people don't get it that the fundamental demand is lot lower than what they have been made to believe by lazy economists who don't look at the actual data. Please look at the data when you have time.
Employment numbers may be deceptively slow to react... this is a result of the surprising number of construction workers in the single-family business who are 'off the books' and have now gone home to Mexico because the jobs here have dried up.
When the next tier - the US citizens who show up in the stats - get laid off, then the number will start to rise.
"Bad news is bullish because it will force Bernanke to lower rates.
arbogast | Homepage | 03.20.07 - 10:08 am | # "
Exactly--all news is good news, whether it's "good" or "bad". Good news shows the economy is (insert superlative here) than expected, while bad news implies a FFR cut. Everything is reason for a rally. I agree with CR, this is not bullish for housing, but apparently we who think that are in the minority.
To whom do the builders think they are going to sell all these new houses? The thousands who are being made homeless by foreclosure? They must be living on another planet.
I wonder if the regional anomaly that Dirk points to is related to Katrina. I notice the BLS has signed off on giving it special attention, but we know that large portions of New Orleans have not been reconstructed. Possibly still reconstructing?
--
"We really need to see starts and permits lowered permanently until inventory drops to a normal 4 months."
Why? Wouldn't you want to have lower home prices? Who routes for higher oil prices? Only born-and-bred ignoramuses route for high home prices. The best way to lower the prices is to have a GLUT. And GLUT we shall have.
When the prices go back to 1996-2000 levels the construction will trickle down to 20-30% of the peak level. Building homes must not remain profitable for the construction to get back in line. Americans have forgotten the economic realities because they could borrow their way out. How long?
My friend in real estate tells me people dont want to buy old, they prefer new with everything modern and so forth. Large amounts of old get bulldozed to build new. That would be unusual in other parts of the world where old is often better built.
If that is true then continued building is not so crazy
Barry over at the Big Picture reminds us that the margin of error for these month-over-month starts is so big as to render the number meaningless:
Note that Privately-owned housing starts, with a headline number of plus 9%, is less than the margin of error of ±10.2%, and according to Census Bureau, "is not statistically significant; that is, it is uncertain whether there was an increase or decrease."
Note, however, that on a year-over-year basis, Starts are down 28.5%, (margin of error of ±6.2%).
That is an artifact of liquidity & cheap debt. It will end once the reality of cost to rebuild on top of tear down is factored in with the real 'time value of money'.
There will still be tear downs - but only the really dilapidated wrecks.
People will look back and wonder what we were smoking - to think somebody could buy a $250K home on a small urban lot, tear it down (at additional cost) and build a $1mm mini-McMansion and make a profit flipping it within a couple years.
We'll never see that again in our lifetimes - I hope.
The "new" lumber is inferior, as any builder will tell you, worried, but the majority of that cost of that typical property is associated with the lot price and not the construction, yes?
Out there somewhere are the stats on building lot appreciation, building costs sf/ft escalation and do we need to look at "material movers" (formerly "residential carpenters") to see what really appreciated?
The old well-built houses have to be torn down and rebuilt because they need more bathrooms, and it's hard to add bathrooms and the associated plumbing on the original floorplans without eliminating closets, and the only thing the old houses had going for them in the first place was big closets.
Similarly, you can't have, as lama put it, the big sq ft devoted to the garage-mahal with a small apartment in the back for the people without a tear-down. All those older homes with frontage wasted on porches and doors and windows? They gotta go.
The "new" lumber is inferior, as any builder will tell you, worried, but the majority of that cost of that typical property is associated with the lot price and not the construction, yes?
On materials...
I have a circa 1915 home & have had to reconstruct & remodel. I've seen the guts and while the wood is solid it is anything but 'dimensional'.
In one case we had to rip up the kitchen floor (substantial dry rot on hard wood floors) only to find the floor joists swam around like a Dali painting. Before we could lay new HW flooring we had to 'sister the joists' to level the floor.
Same thing with the walls.
The 'cut wood' today is frequently 'inferior' in quality as measured by knots & such. But even that is changing as more commercial long leaf yellow pines becomes mature & replaces crappy wild 'regrowth' sources.
My guess is the south will grow more wood than cotton or food by the middle of the century... much of it yellow pine & ass kick.
Couple that with well designed composites (things like particle board & laminates with solid wood edges that make them look & behave like 'I-Beams').
I saw a program on recycled wood structural members being done at U Wisconsin a few years ago - fantastic stuff & relatively cheap too.
I see a lot of these kinds of products in development - many are VERY good.
I'm not as pessimistic as some about the quality & supply of materials in the future.
Recycled wood is a nice idea and is ok where you want the effect but the reality of saws being destroyed by nails makes it impractical/uneconomic even if you have a skipload of wood outside at least at current wage rates.
My mums generation knew that money did not grow on trees - she was born 1929. Already my generation were forgetting about it and prospering from forgetting about it.
We'll never see that again in our lifetimes - I hope.
The problem is, they have huge amount of land nobody needs. Instead of writing down the land, take huge loss and face margin call on all debts, they rather prefer to stick a shovel or two on this land and mark it "under construction".
And they hope maybe Bernanke will come to rescue and do something.
The old well-built houses have to be torn down and rebuilt because they need more bathrooms, and it's hard to add bathrooms and the associated plumbing on the original floorplans without eliminating closets, and the only thing the old houses had going for them in the first place was big closets.
Closets? What are closets? I've heard of those but never seen one.
Actually the reason we had to redo our kitchen is because the people before us replumed the bathroom & cut joists like crazy & severely compromised the ceiling of the kitchen which was right below the bathroom... hence one day the plaster in the kitchen ceiling gave way.
Thank goodness we had repaired the bathroom a few years before (and sistered those joists too) else the whole bathroom might have come down. It was a lovely scene as it was.
In general though - old houses if 'designed right' are VERY economical to own & pleasant to live in.
That is a mighty big 'IF'.
Our house has NO insulation except for what we had blown into the attic. The walls were stuffed with newspapers from WWI - that is the extent of our wall insulation.
Plus the whole house is drafty as hell (snow drifts under a door on occasion). For many years we had a Siberian Husky who slept as close to that door as possible (to stay cool)... he acted like a door muff. He's dead & our current dogs prefer to sleep near the wood stove (not huskies).
Remember I live in Minnesota.
Yet with all that my heating bills are still quite a bit less than most all my friends who's homes are far newer & supposedly well insulated.
Reason?
(1) Smart design (my house is like a Craftsman-style bungalow but two story)... very cubic, open plan with great airflow.
(2) Its small... less than 1200 sqft. We've had as many as six in there (wife & I, three kids and her adult brother). Cozy.
Who said anti-social Norwegians can't get along... even in the long almost sunless winter months we never killed each other... though we thought about it at times.
People will continue to remodel - they just need to be smarter about what they do & why.
Recycled wood is a nice idea and is ok where you want the effect but the reality of saws being destroyed by nails makes it impractical/uneconomic even if you have a skipload of wood outside at least at current wage rates.
When they say 'recycle' they really mean 'recycle' not 'reuse'. Think huge industrial shredders mixing wood scrap & paper and what have you into extruders that then mix polymers to bind it. Even a lot of the polymers are 'recycled' too... milk jugs & what have you.
Any metal (like nails) gets pulled out with magnets in the front end of the process after shredding.
The processes are so automated as to be nearly insensitive to wage rate (capital cost is another issue).
And the product when done is fabulous to work with - cuts better than all but the best virgin straight grained wood. A friend at Anderson Windows gave me some to play with - very easy to cut & cleanly too.
The 'guts' of many high end windows & doors currently use this stuff - it will eventually be used for joists & such as the cost comes down to extrude longer lighter pieces. Not there yet.
And you wouldn't want this stuff 'visible' unless sealed & painted... but for structural members its fabulous stuff - very stable & strong and comparable in price to better grades of studs & joists but not as cheap as 'Home Depot' grades...
dryfly, I grew up in a home slightly under your 1200 sq ft. Two adults, two and for a few years three children, plus one dog and one cat. One bathroom. One television.
My parents' current home--which they built long after the last child made her way out into the world--has three full bathrooms and three televisions. For two adults, one dog, and three cats. It is approximately 2600 sq ft.
They were talked into the bathrooms by a builder who said it would have no "resale value" otherwise. The televisions are their own fault. One of the cats used to be mine, but I got relocated. One of the other cats used to be my cousin's kid's, but he got relocated. My parents run a home for used cats. Still, cats don't take up that much space.
So thanks to some builder, when I finally inherit that house (and get the cat back, probably), I will be able to sell it because it has more potties than current human occupants. I guess I'm grateful.
Starts declined significantly
Starts increased significantly (MoM). But permits declined, which is ultimately more relevant.
Notice both the bond market and stock futures are rallying on this news. It really illustrates the short-term mentality of the stock market.
You give great information - just discovered you last week. Thanks for all you do.
You wouldn't happen to have the month-on-month figures for Jan-Feb 05 and 06 on hand would you? I'm wondering where the 9 percent increase MoM this year falls relative to past years.
Thanks.
If starts had been below expectations, that would have been bullish too, as it would mean builders are on their way to reducing inventories. All news is good news once again.
Nikki is right. So builders are adding more spec units to inventory than exepected. That is decidely bad news.
And Completions declined significantly
That makes the relatively few number of construction job losses in February even stranger.
Ben Stein Says Economy Is Fine - CBS Sunday Morning - CBS News
any thoughts on this?
I would appear that the same slime that was pushing and selling the toxic loans to investors are now the same slime that is buying it up on the real cheap. I hope that the sec goes after this slime.
Ben Stein is behind all this!?!?
ac, I can't see this report as anything but negative news for housing.
The story is completions ... and the coming loss of jobs. Why anyone thinks this is bullish is beyond me. The best thing for the homebuilders would be if starts fell to 1.2 million or so, then inventories would be coming down.
Best to all.
Bad news is bullish because it will force Bernanke to lower rates.
Bonnie -- in 2006, starts fell 5.87% between January and February. In 2005, starts rose 3.6% for the same MOM period.
If you accept that real new home sales (after cancellations) are running at around 750k, and 33% of housing starts are for rental units, then at 1550k housing starts are still running about 300k too high. The housing industry still has to undergo a significant (15%?) further contraction just to hit a point where inventory isn't expanding, and probably more like 25% to deal with the inventory overhang, assuming sales stay at historically high levels. Oddly, I'm not hearing that spin on CNBC this morning.
Job loss is the key and since CR as educated us on the importance of the builders to the overall economy we can expect further stories like this one from thehousingbubbleblog this a.m.
Flaglers construction industry has lost about 150 jobs, slipping below 2,000, said Sharon Warriner, spokesman for the Workforce Development Board of Flagler and Volusia. More significant, she said, was a huge cutback in Flaglers real estate and mortgage industry, shrinking from nearly 2,000 workers in September 2005 to 532 the following summer.
There is a very interesting regional story in the data. All the strength in starts was in the West and South while the NE and MW continued to implode. Starts in the west were up 26.4% for the month, but still down 30.9% yr/yr. In the South starts were up 18.0% and down 20.3% yr/yr. However in the MW, starts were down 14.4% for the month and down 50.6% yr/yr while in the NE starts were down 29.7% for the month and 27.4% yr/yr (down more for month than year there is interesting). All regions are not equal. Dixie is far and away the most important and becoming more so, accounting for 54% of starts this month vs. less than 49% a year ago. The regional patterns for permits were simalar, but not as extreme. Clearly weather played some role in February's numbers, even seasonally adjusted as evidenced by the regional pattern.
Anyone notice the eerie similarity in the early 1970s starts trend with the current trend? Looks like we are just in that little headfake phase before the next major plummet.
Given that weather nationwide deteriorated from roughly normal in January to among the worst of recent Februarys, might completions have fallen partly because builders couldn't get them done, rather than because the inventory of uncompleted homes has been diminished? I have not argument with the notion that falling starts some time back have led to falling completions now, but the magnitude of the drop seems too big. Builders, like many other goods-makers, function most efficiently by smoothing things out, rather than by straining capacity one month only to lay off in the next. Note that homes under construction fell only 0.7% while completions fell 9.4%. If the weather allowed, I'd expect those to figures to be more similar.
KHarris: Completions follow a very definite seasonal pattern, with the high coming in December and the low in January. Until this year, not-seasonally adjusted coompletions had risen compared with January in every February since 1999. This probably isn't a weather effect; most likely it's that many fewer houses are in the pipeline to be completed. Single-family houses under construction are down a record 21% yoy in the South, a record 27% in the Midwest and a near-record 21% in the West. (Data set goes back to 1985)
k harris,
I'm not an expert in building but as far I know completions are almost unaffected by the weather because the final part of the building process is indoors (flooring, tiling, painting, etc.)
--
CR,
THAT IS WHY IT IS VERY IMPORTANT TO COME UP WITH THE CORRECT ESTIMATE FOR THE FUNDAMENTAL DEMAND, AS IN DWELLINGS.
IF THE FUNDAMENTAL DEMAND IS 1.45M, AS MY CALCULATIONS SHOW, AND NOT 1.7M, AS YOU ESTIMATE, CONSTRUCTION, INCLUDING PERMITS, ETC., IS EITHER ABOVE OR BELOW THE DEMAND.
I claim that we are still continuing to add to the Vacant Units. The builders are NOT working off the inventory; they are building the inventory. These clueless people don't get it that the fundamental demand is lot lower than what they have been made to believe by lazy economists who don't look at the actual data. Please look at the data when you have time.
Jas
Employment numbers may be deceptively slow to react... this is a result of the surprising number of construction workers in the single-family business who are 'off the books' and have now gone home to Mexico because the jobs here have dried up.
When the next tier - the US citizens who show up in the stats - get laid off, then the number will start to rise.
"Bad news is bullish because it will force Bernanke to lower rates.
arbogast | Homepage | 03.20.07 - 10:08 am | # "
Exactly--all news is good news, whether it's "good" or "bad". Good news shows the economy is (insert superlative here) than expected, while bad news implies a FFR cut. Everything is reason for a rally. I agree with CR, this is not bullish for housing, but apparently we who think that are in the minority.
To whom do the builders think they are going to sell all these new houses? The thousands who are being made homeless by foreclosure? They must be living on another planet.
I wonder if the regional anomaly that Dirk points to is related to Katrina. I notice the BLS has signed off on giving it special attention, but we know that large portions of New Orleans have not been reconstructed. Possibly still reconstructing?
We really need to see starts and permits lowered permanently until inventory drops to a normal 4 months.
--
"We really need to see starts and permits lowered permanently until inventory drops to a normal 4 months."
Why? Wouldn't you want to have lower home prices? Who routes for higher oil prices? Only born-and-bred ignoramuses route for high home prices. The best way to lower the prices is to have a GLUT. And GLUT we shall have.
When the prices go back to 1996-2000 levels the construction will trickle down to 20-30% of the peak level. Building homes must not remain profitable for the construction to get back in line. Americans have forgotten the economic realities because they could borrow their way out. How long?
Jas
My friend in real estate tells me people dont want to buy old, they prefer new with everything modern and so forth. Large amounts of old get bulldozed to build new. That would be unusual in other parts of the world where old is often better built.
If that is true then continued building is not so crazy
... in 2006, starts fell 5.87% between January and February. In 2005, starts rose 3.6% for the same MOM period.
Thank you Mike_in_FL - Not exactly trending, that one.
Barry over at the Big Picture reminds us that the margin of error for these month-over-month starts is so big as to render the number meaningless:
Note that Privately-owned housing starts, with a headline number of plus 9%, is less than the margin of error of ±10.2%, and according to Census Bureau, "is not statistically significant; that is, it is uncertain whether there was an increase or decrease."
Note, however, that on a year-over-year basis, Starts are down 28.5%, (margin of error of ±6.2%).
The Big Picture
Large amounts of old get bulldozed to build new.
That is an artifact of liquidity & cheap debt. It will end once the reality of cost to rebuild on top of tear down is factored in with the real 'time value of money'.
There will still be tear downs - but only the really dilapidated wrecks.
People will look back and wonder what we were smoking - to think somebody could buy a $250K home on a small urban lot, tear it down (at additional cost) and build a $1mm mini-McMansion and make a profit flipping it within a couple years.
We'll never see that again in our lifetimes - I hope.
The "new" lumber is inferior, as any builder will tell you, worried, but the majority of that cost of that typical property is associated with the lot price and not the construction, yes?
Out there somewhere are the stats on building lot appreciation, building costs sf/ft escalation and do we need to look at "material movers" (formerly "residential carpenters") to see what really appreciated?
It's the plumbing and the parking.
The old well-built houses have to be torn down and rebuilt because they need more bathrooms, and it's hard to add bathrooms and the associated plumbing on the original floorplans without eliminating closets, and the only thing the old houses had going for them in the first place was big closets.
Similarly, you can't have, as lama put it, the big sq ft devoted to the garage-mahal with a small apartment in the back for the people without a tear-down. All those older homes with frontage wasted on porches and doors and windows? They gotta go.
I'm studying for the RE exams.
The "new" lumber is inferior, as any builder will tell you, worried, but the majority of that cost of that typical property is associated with the lot price and not the construction, yes?
On materials...
I have a circa 1915 home & have had to reconstruct & remodel. I've seen the guts and while the wood is solid it is anything but 'dimensional'.
In one case we had to rip up the kitchen floor (substantial dry rot on hard wood floors) only to find the floor joists swam around like a Dali painting. Before we could lay new HW flooring we had to 'sister the joists' to level the floor.
Same thing with the walls.
The 'cut wood' today is frequently 'inferior' in quality as measured by knots & such. But even that is changing as more commercial long leaf yellow pines becomes mature & replaces crappy wild 'regrowth' sources.
My guess is the south will grow more wood than cotton or food by the middle of the century... much of it yellow pine & ass kick.
Couple that with well designed composites (things like particle board & laminates with solid wood edges that make them look & behave like 'I-Beams').
I saw a program on recycled wood structural members being done at U Wisconsin a few years ago - fantastic stuff & relatively cheap too.
I see a lot of these kinds of products in development - many are VERY good.
I'm not as pessimistic as some about the quality & supply of materials in the future.
Recycled wood is a nice idea and is ok where you want the effect but the reality of saws being destroyed by nails makes it impractical/uneconomic even if you have a skipload of wood outside at least at current wage rates.
My mums generation knew that money did not grow on trees - she was born 1929. Already my generation were forgetting about it and prospering from forgetting about it.
Its booked again for 2082:-)
Current chart for starts is firmly below last recession' levels and does not flatten out yet.
Of course builders are building inventory.
The problem is, they have huge amount of land nobody needs. Instead of writing down the land, take huge loss and face margin call on all debts, they rather prefer to stick a shovel or two on this land and mark it "under construction".
And they hope maybe Bernanke will come to rescue and do something.
Duly appreciated architectural appraisal of the Old Fashioned Dwelling, Tanta:
All those older homes with frontage wasted on porches and doors and windows? They gotta go.
Likewise the Stunning New Residence that allows your home to say all that needs to be said about you:
It's the plumbing and the parking.
Like, this is where my car lives and yes I pee a lot.
The old well-built houses have to be torn down and rebuilt because they need more bathrooms, and it's hard to add bathrooms and the associated plumbing on the original floorplans without eliminating closets, and the only thing the old houses had going for them in the first place was big closets.
Closets? What are closets? I've heard of those but never seen one.
Actually the reason we had to redo our kitchen is because the people before us replumed the bathroom & cut joists like crazy & severely compromised the ceiling of the kitchen which was right below the bathroom... hence one day the plaster in the kitchen ceiling gave way.
Thank goodness we had repaired the bathroom a few years before (and sistered those joists too) else the whole bathroom might have come down. It was a lovely scene as it was.
In general though - old houses if 'designed right' are VERY economical to own & pleasant to live in.
That is a mighty big 'IF'.
Our house has NO insulation except for what we had blown into the attic. The walls were stuffed with newspapers from WWI - that is the extent of our wall insulation.
Plus the whole house is drafty as hell (snow drifts under a door on occasion). For many years we had a Siberian Husky who slept as close to that door as possible (to stay cool)... he acted like a door muff. He's dead & our current dogs prefer to sleep near the wood stove (not huskies).
Remember I live in Minnesota.
Yet with all that my heating bills are still quite a bit less than most all my friends who's homes are far newer & supposedly well insulated.
Reason?
(1) Smart design (my house is like a Craftsman-style bungalow but two story)... very cubic, open plan with great airflow.
(2) Its small... less than 1200 sqft. We've had as many as six in there (wife & I, three kids and her adult brother). Cozy.
Who said anti-social Norwegians can't get along... even in the long almost sunless winter months we never killed each other... though we thought about it at times.
People will continue to remodel - they just need to be smarter about what they do & why.
Recycled wood is a nice idea and is ok where you want the effect but the reality of saws being destroyed by nails makes it impractical/uneconomic even if you have a skipload of wood outside at least at current wage rates.
When they say 'recycle' they really mean 'recycle' not 'reuse'. Think huge industrial shredders mixing wood scrap & paper and what have you into extruders that then mix polymers to bind it. Even a lot of the polymers are 'recycled' too... milk jugs & what have you.
Any metal (like nails) gets pulled out with magnets in the front end of the process after shredding.
The processes are so automated as to be nearly insensitive to wage rate (capital cost is another issue).
And the product when done is fabulous to work with - cuts better than all but the best virgin straight grained wood. A friend at Anderson Windows gave me some to play with - very easy to cut & cleanly too.
The 'guts' of many high end windows & doors currently use this stuff - it will eventually be used for joists & such as the cost comes down to extrude longer lighter pieces. Not there yet.
And you wouldn't want this stuff 'visible' unless sealed & painted... but for structural members its fabulous stuff - very stable & strong and comparable in price to better grades of studs & joists but not as cheap as 'Home Depot' grades...
dryfly, I grew up in a home slightly under your 1200 sq ft. Two adults, two and for a few years three children, plus one dog and one cat. One bathroom. One television.
My parents' current home--which they built long after the last child made her way out into the world--has three full bathrooms and three televisions. For two adults, one dog, and three cats. It is approximately 2600 sq ft.
They were talked into the bathrooms by a builder who said it would have no "resale value" otherwise. The televisions are their own fault. One of the cats used to be mine, but I got relocated. One of the other cats used to be my cousin's kid's, but he got relocated. My parents run a home for used cats. Still, cats don't take up that much space.
So thanks to some builder, when I finally inherit that house (and get the cat back, probably), I will be able to sell it because it has more potties than current human occupants. I guess I'm grateful.
Uh oh! We may have to change our definition of the "McMansion."
McDonald's Rewrites Definition of Chutzpah | Mother Jones
icely done.
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