HOUSING NEWS REPORT
BY ATTOM DATA SOLUTIONS
Rethinking Homeownership: An Entrepreneur’s Perspective MY TAKE ARTICLE BY ATTOM DATA SOLUTIONS.
by Pam Hughes, Co-Founder of CoBuy
reat challenge often breeds creative solutions, even simple
divergent forces of supply and demand have created unsustainable home price appreciation. Today, home values in many metros across the nation are experiencing year-over-year price appreciation that is still accelerating and is projected to continue into 2018. The table on p. 28 shows the 20 largest regions in a home price report and highlights those regions with accelerating year-over-year appreciation rates in addition to a look at price appreciation for the month of September compared to August 2017. Clearly, if housing affordability is an issue today, we are on a trajectory that cannot be supported with current thinking about homeownership. For the past several years, as millennials have been coming of age to buy their first homes, there have been several reasons given why we weren’t seeing typical first time buying activity. There was the fact that living wage jobs were not available to these newly anointed adults and that student debt was keeping them from amassing a down payment. There was also the theory that this generation was not interested in homeownership. There was a belief that millennials did not want to be tied down
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ones. A decade after the start of the Great Recession, the residential real estate market is climbing out of the depths of disaster -- but a different sort of crisis has emerged. The problem is that of housing affordability, especially in many of the country’s largest metropolitan areas. America’s housing bust left the supply side of the market lagging woefully behind the hockey stick growth curve in demand. Necessarily, growth took a hiatus during the downturn. Housing supply was scooped up at bargain basement prices putting anyone who didn’t need to sell in a holding pattern. Supply quickly evaporated as prize- takers descended on the fire sale that was housing. Ever since, the rate of replenishing supply has suffered from a sluggish and heavy burdened re-start while demand has built momentum at a sprinter’s pace. Today, supply of existing homes is near a 30-year low, according to the Census Bureau and is declining at a rate of about 10 percent per year. In many major metropolitan areas, demand is strong and growing. The
INMANYMAJOR METROPOLITAN AREAS, DEMAND IS STRONG AND GROWING. THE DIVERGENT FORCES OF SUPPLY AND DEMAND HAVE CREATED UNSUSTAINABLE HOME PRICE APPRECIATION. TODAY, HOME VALUES INMANYMETROS ACROSS THE NATION ARE EXPERIENCING YEAR-OVER-YEAR PRICE APPRECIATION THAT IS STILL ACCELERATING AND IS PROJECTED TO CONTINUE INTO 2018.”
by real estate ownership. Alas, these impediments have largely been overcome or refuted. For first time homebuyers especially, supply has become more severely diminished relative to demand during each passing year. The resulting home price increases delay first time homebuyers’ ability to amass their down payments and outpace the rise in incomes, causing these prospective
buyers to fall further behind on the treadmill leading to homeownership. Crisis spawns opportunity. The present housing affordability crisis is no exception and many an entrepreneur, myself included, has gone to work to solve the problem for would-be homeowners. Many are working on the supply side, some are working on the policy side to reduce
costs of building and increase density and still others are attacking the affordability challenge through other means. One approach that is not new, but is gaining popularity is the notion of buying with others. Some call it shared equity, some call it co-ownership, co- living, co-housing or co-buying. In fact, Peter Miller wrote an article
26 | think realty magazine :: february 2018
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