FEATURED ARTICLE: The New Path Toward Tomorrow's Real Estate Profits
Perhaps most amazingly, the National Association of Realtors reported that in May the median existing home prices reached $277,700, “the 87th straight month of year-over-year gains.” With such consistent price increases surely housing debt must have increased, right? No. According to the Federal Reserve Bank of New York, housing debt reached $9.65 trillion. That’s less than the housing debt outstanding in 2008! But why is it that homeowners are not, as the expression goes, “putting their equity to work”? “It’s probably not one thing in particular,” says Clear Capital. “Interest rate movements, tax law changes, lender restrictions, and an upcoming election year may be to blame. Consumers could be leaning toward the security of fixed-rate home equity loans over the unpredictability of adjust- able-rate HELOCs. And there may be another, simpler explanation: Consumers are still feeling the emotions, experiences, and im- pacts from the Great Recession, and are wary of taking on debt linked to their homes.” Part of the reason for the fall-off in borrower demand is that many consumers are more interested in experiences rather than stuff. “Experiences become a part of our identity,” explains Dr. Travis Bradberry, writing for The Huffing- ton Post. “We are not our posses- sions, but we are the accumula- tion of everything we’ve seen, the
ing a room overnight, selling back solar-power energy from a roof array, or cutting costs with a front-lawn garden – are increasingly with us. • When it comes to additional debt, the widespread attitude is “thanks, but no thanks.” People are increasingly follow- ing the guidance of such books as Small is Beautiful and The Millionaire Next Door. Real estate change is here and with it new opportunities to profit and flourish. As auto executive Lee Iacoc- ca long ago said, the choices are to “lead, follow or get out of the way.”
things we’ve done, and the places we’ve been. Buying an Apple Watch isn’t going to change who you are; taking a break from work to hike the Appalachian Trail from start to finish most certainly will.” Where’s the opportunity? It’s time to re-think the old playbook.
• Big isn’t automatically better.
• Existing properties can be revitalized with new uses.
• Zoning is under siege; the stan- dards of yesterday are in flux. • Income-producing residential homes – whether from rent-
14 think realty housing news report
september 2019 15
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