Operations
payments run up in a short period, people no longer participate or stay in the market. People won’t move if they feel they will get less for their money. People won’t buy if they feel it is cheaper to rent. People won’t invest if rents are lower than payments. This affects the decisions of buyers, sellers, and investors. Likewise, dramatic increases in taxes, HOA fees, or insurance affect the real estate market negatively. To keep payments sustainable, any increases in these items must be reasonable and not run up in a short period of time. We should advocate for policies that encourage this. LOCATION SUSTAINABILITY Highly cyclical markets that see prices fluctuate greatly whether from a weather event, speculation in the market, or other factors will become less desirable. Demand will decrease, at least for a time, because fewer participants will want to take the risk and will opt for a wait-and-see approach. The real estate market is not the only sector impacted in these situations. Funding of local governments and schools also take a hit, which just makes the situation worse.
The best way to predict the future is to create it.” —Peter Drucker
wealthy can easily afford, or if young people believe it is not attainable or even desirable, how does that affect housing and wealth creation long term? Real estate is still a fantastic asset to own and aspire to own. It is still the best way for people to have economic security and build wealth. As real estate professionals, we should be advocating for policies that encourage home ownership and affordable housing and make decisions in our practices that ensure there is a pathway for everyone to build wealth with real estate—and for everyone to believe it is both desirable and possible for them. SUSTAINABILITY MATTERS Sustainability in real estate is about more than just environmental considerations— it’s about creating a balanced ecosystem where housing is affordable, payments are manageable, locations remain stable, and opportunities are accessible for everyone. By addressing these five pillars of sustainability—price appreciation, interest rates, payments, location, and opportunity—real estate professionals and policymakers can
help foster a market that benefits buyers, sellers, and investors alike. Ultimately, housing sustainability is about securing the future of real estate as a pathway to economic stability and wealth creation. By advocating for thoughtful policies and practices, we can ensure that homeownership remains both attainable and desirable for generations to come.
Flip the Script on Sustainability ECO-FRIENDLY IS NOT ENOUGH: A LOOK AT HOUSING SUSTAINABILITY TO SET THE STAGE FOR AFFORDABLE HOMES.
JEFF ROTH
JEFF ROTH
W hen we hear the word which is undoubtedly important. But it’s not the only sustainability game in town. In fact, for people who cannot afford housing, it maybe not the most important. There are five pillars of sustainability important to everyone when it comes to housing: ▷ PRICE APPRECIATION ▷ INTEREST RATE sustainability we think of environmental sustainability,
PRICE APPRECIATION SUSTAINABILITY
INTEREST RATE SUSTAINABILITY The cost of money affects buyers, sellers, and investors.
When prices increase faster than what people can afford or feel they can afford, it will affect demand for owning housing. Markets must remain as free as possible to ensure accurate price discovery. As real estate professionals, we should advocate for housing policy that minimizes cost-increasing regulations on new construction while also avoiding policies that contribute to unsustainable price inflation, as seen in the post-pandemic market.
Predictability in a location helps to keep real estate sustainable.
If interest rates run up quickly and stay high, it makes it difficult to plan and reduces the willingness of buyers to buy, sellers to sell, and investors to invest. PAYMENT SUSTAINABILITY Most people make their buying decisions based on the payment. One of the beautiful things about owning real estate is the payment stays relatively fixed. When
Jeff Roth is the founder of Arbor Advising in Ann Arbor, Michigan. Arbor Advising is a real estate consultancy passionate about helping clients invest, buy and sell in Michigan. You can contact Jeff at jeff@arboradvising.com, visit www. arboradvising.com, or subscribe to the weekly newsletter at www. arboradvising.com/subscribe.
OPPORTUNITY SUSTAINABILITY
The government encourages housing development, providing housing, and owning a home. One of the cornerstones of economic security and wealth building is owning your own home. If owning real estate becomes something only the
▷ PAYMENT ▷ LOCATION ▷ OPPORTUNITY
36 | think realty magazine :: january - february 2025
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