Tag: replacement cost

Stuff worth reading before 2009 (UPDATED)

Take your time – you’ve got about 36 hours

  • Cheap cement is pouring into the US, and it’s creating headaches for Cemex, the largest US producer. Don’t feel sorry for them though – they’ve been pushing through price increases in the midst of plummeting construction. I wonder how this will effect the ‘replacement cost’ line on all those home refinancing appraisals being jammed through right now.
  • If you’re a skier, there’s hardly a better time to come to Colorado than now – snowpack is at 120% of normal. If you’re the fly fishing type, you might want to check clarity conditions before heading out this spring, and you may want to pick up another hobby for the first half of the summer – if this keeps up, we are going to be wading in chocolate.
  • If you just got laid off, there is no reason to lie about it. It’s hardly ever personal when the economy is in the tank, so talk it up – you might land that next job as a result. However, you could also discuss a made-up controversy designed to distract you from making next month’s mortgage payment, or log into the social network de jour so everyone knows you’re doing nothing but sitting in a coffee shop.
  • And…

  • If you are a hedge fund manager, just write 2008 off. If you were thinking about blogging for a living next year, forget about it. UPDATE: Ditto (i.e. I don’t think Denton is panicking – I think he knows his shit).


Aggregate Market Value of U.S. Residential Real Estate

I’ve seen this question pop up a number of times, and in each case different numbers are floated as the answer. So why not throw out another?

According to the Federal Reserve the aggregate market value of all the residential real estate in the US, as of Q1 – 2008, was (a) $19.718 trillion. In addition, there was (b) $10.601 trillion in mortgages against that real estate. Chart of growth below (click for larger view):


The estimate replacement cost of residential real estate structures at Q1-2008 was (c) $14.283 trillion. And here is a graph of the change in replacement cost of those residential structures over the period – this should provide some idea of the amount of value injected into the economy as a result of residential real estate construction (inflation notwithstanding):


Note: There are probably a few apples versus orange discrepancies as it relates to values, mortgages, and replacement costs on farm households, mobile homes, and second homes, as well as second liens taken out against properties. Also, multi-family residences were excluded where possible, as I could not ascertain what might be purely rental property.

Source: The Federal Reserve Flow of Funds Statements
(a) B.100 Balance Sheet of Households and Nonprofit Organizations – line 4
(b) L.100 Households and Nonprofit Organizations – line 25
(c) B.100 Balance Sheet of Households and Nonprofit Organizations – line 42