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deferred home maintenance, particularly impacting homeowners living on fixed retirement incomes and homeowners getting low returns on fixed savings accounts -- all contributing factors to why homeowners are residing in homes longer. “For first-time home buyers”, said Valerie Neeley of First Team Real Estate in Mission Viejo, California, “down payment resources are limited, due to home buyers’ outstanding student loan debts, as well as employer’s inability to compensate employees at increasing rates that would keep up with the rate of increased housing costs.” With an inability to purchase, the

pool of potential first-time homebuyers continues to add to the demand for rental housing in many communities, thus increasing the prices of rents being paid by consumers while also taxing the ability of these potential first-time homebuyers to save for down payments. The increased pricing in rental housing also motivates institutional investors to retain their investments in residential housing across the country, maintaining the largest inventory of investor-owned residential housing our country has ever experienced, and limiting residential inventory available for purchase. “Down payment assistance programs,

grant programs for inner city housing, and government-backed FHA and VA financing are fast becoming the vogue methods of financing in assisting first- time home buyers, as well as veterans,“ said Neeley. “So long as real estate agents can find the inventory.” According to a 2015 ACS study of the National Association of Homebuilders (see chart below), “homeowners with higher family incomes tend to live in the newer residential units. In 2015, the average household income for owner- occupied homes built after 2010 was $121,577, which was higher than the $86,328 average family income for those living in homes built before 1969.

Moreover, younger homeowners are more likely to live in newer homes. Homes built after 2010 are headed by homeowners with a median age of 44 years, compared to homes built prior to 1969 owned by householders with a median age of 58.” These statistics imply a growing market for renovations for older homeowners who can afford the cost of renovations to stay in place, and also show that younger home buyers are electing to purchase newer inventory homes, likely at least in part to avoid the added costs of deferred home maintenance that comes with older homes. While increasing prices have caused many homeowners to remain in homes longer, there is one sector of the market that has seen improvement in increasing inventory and sold transactions. The national luxury housing sector has experienced an increase in available inventory as demand has stabilized and a slight decline in pricing has reduced average days on market to 162 days, as evidenced by the recently released August 2017 luxury housing report published by the Institute for Luxury

Home Marketing. “The coastal luxury homes market of Southern California has been strong over the course of this summer,“ states Jody Clegg of First Team Real Estate in Huntington Beach, California. “Lux- ury home sellers have experienced an increased demand for their homes due to increasing consumer confidence in the economy, increasing jobs in mid- to senior-level employment positions, as well as an ability to cash in on awesome returns from the stock market. “Couple these positives with the fact that luxury home sellers have a larger inventory to choose from, increased relocation opportunities for senior level employees, as well as conforming loan limits being raised to $625,500 earlier in the year, 2017 has been the year of the consumer within the luxury market- place,” Clegg added. In close, the market is today as the market was yesterday, and as it will be tomorrow. Our markets are the result of supply and demand. As we prepare for 2018, increasing jobs across the country, improving lending restrictions of the past decade, reduction in

overall income tax rates, increasing opportunities of down payment assistance, and greater deferment of student loan debt, are all external factors that can and will fuel growth of listing inventory and opportunity across the U.S. housing market. Without changes in any of these such factors, growth across the U.S. housing market will likely remain stable to positive for the coming year, with moderate overall increases in unit transactions, and flat in overall pricing volume. Jobs…Jobs…Jobs…is where the answer lies, and if this becomes the reality for our U.S. economy in 2018, all bets will be on a robust housing market to close out this decade. •

WHO IS OCCUPYING DIFFERENT HOUSING STOCK?

HOUSING INCOME (LEFT AXIS)

AGE OF HOUSING HEAD (RIGHT AXIS)

70

140,000

60

120,000

50

100,000

40

80,000

30

60,000

40,000

20

As president of First Team Real Estate, the 16th largest volume brokerage in the country, Michael Mahon operates with the mentality that relationships are the

20,000

10

driving force behind every successful real estate brokerage in the industry, and is honored to support the organization’s 1,735 sales associates throughout California markets. Mahon has more than 26 years of comprehensive real estate experience spanning the residential and commercial sectors.

0

0

1969 or earlier

1970-1979

1980-1989

1990-1999

2000-2009

2010 or later

SOURCE: ATTOM DATA SOLUTIONS

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