trends, according to Stech. The issue is compounded by the fact that with interest rates still below three percent, there’s high demand. The Sundae team has noticed more de-urbanization and movement from highly dense cities to less densely populated suburbs. Sellers want to upgrade or downsize but are stuck in a holding pattern. They can’t sell their home until they know there’s something available for them to buy and move into. Meanwhile, home price appreci- ation is increasing, much to home- owners’ and property investors’ delight, said Stech. The other side of that coin is affordability, however. If or when upward pressure on interest rates begins to translate to higher mortgage rates, potentially due to robust employment gains and infla - tion, double-digit annual apprecia- tion could subside. Stech believes this is going to be good news for the buyers who are on the sidelines because they have given up after being outbid a dozen times. The concern is, the biggest wave of millennials to reach the median home buying age is yet to come, while a lot of baby boomers prefer to age in place. Meanwhile builders, scarred by the events of the last recession, are proceeding cautiously, so the supply issue isn’t going to ease for a long time, especially when it comes to entry-level homes. “Every year, fewer and fewer homes under 1,400 square feet are built, the typical entry level size for younger, first-time home buy - ers,” Stech said. “At the same time younger home buyers prefer newer or renovated like-new, open concept homes with a space for home office. This is an exciting opportunity where Sundae can help out.” Additionally, Stech has noticed a lot of innovation within the residen-
fragmented, opaque businesses. I call venture capital ‘optimistic capital’. It’s people who say, ‘Here’s a bunch of mon- ey. You’re a smart team and you’re going after a big, exciting problem. I don’t need a financial return for a long time. Just make a big, transformational company that does a lot of good in the world.’ “I saw that at LendingHome; it was the first time I’d seen venture capital in action, allowing us to transform an industry. I wanted to do that again, so I pointed my focus at a massive problem for which I had tremendous passion.
Starting Sundae or starting any busi- ness, no matter how big or small, comes with its challenges. But with the right people around the table, it’s worth it. It’s been almost three years, and it’s the most rewarding experience of my life by far.” HANDLING THE BIG DEMAND, LIMITED SUPPLYREAL ES - TATE ISSUE The lack of inventory is one of today’s most dramatic real estate
20 | think realty magazine :: august 2021
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