How the market has shifted in just a few years
Devin JamesPro Member
Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votesHow the market has shifted in just a few years
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesQuote from @Chris Seveney:
Quote from @Devin James:
In 2021, we saw buyers upgrading to larger homes, taking advantage of 3% interest rates to afford an extra 300+ square feet.
Today, smaller homes are selling much faster as higher rates make additional square footage less affordable.
While rates are historically average, I don’t see them dropping significantly. Combine that with America’s housing shortage, and the solution becomes clear:
We need to build more homes that align with what buyers can afford. That is smaller units built with higher density to make the numbers work for both buyers and builders.
Adapting to these challenges isn’t easy, but it’s necessary to keep up with the market.
What are your thoughts on how builders and developers can address affordability and supply issues.
I believe the housing shortage is a farce - there is no housing shortage - there is an affordability issue and an inventory issue - but there is plenty of housing. The same was being said 15 years ago and we went from this huge shortage to being able to pick almost any home you wanted for 4 years and we were not building anything.
I agree.. just look at any large mid west or rust belt metro.. there is a ton of houses avaliable the question though will folks buy in certain neighborhoods where inventory is readily avaliable you can buy existing in many of these markets for far less than new builds..
so to me its really a neighborhood issue a school issue a crime issue etc etc..
6 Replies
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Devin James:
In 2021, we saw buyers upgrading to larger homes, taking advantage of 3% interest rates to afford an extra 300+ square feet.
Today, smaller homes are selling much faster as higher rates make additional square footage less affordable.
While rates are historically average, I don’t see them dropping significantly. Combine that with America’s housing shortage, and the solution becomes clear:
We need to build more homes that align with what buyers can afford. That is smaller units built with higher density to make the numbers work for both buyers and builders.
Adapting to these challenges isn’t easy, but it’s necessary to keep up with the market.
What are your thoughts on how builders and developers can address affordability and supply issues.
I believe the housing shortage is a farce - there is no housing shortage - there is an affordability issue and an inventory issue - but there is plenty of housing. The same was being said 15 years ago and we went from this huge shortage to being able to pick almost any home you wanted for 4 years and we were not building anything.
7e investments53 Reviews - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Chris Seveney:
Quote from @Devin James:
In 2021, we saw buyers upgrading to larger homes, taking advantage of 3% interest rates to afford an extra 300+ square feet.
Today, smaller homes are selling much faster as higher rates make additional square footage less affordable.
While rates are historically average, I don’t see them dropping significantly. Combine that with America’s housing shortage, and the solution becomes clear:
We need to build more homes that align with what buyers can afford. That is smaller units built with higher density to make the numbers work for both buyers and builders.
Adapting to these challenges isn’t easy, but it’s necessary to keep up with the market.
What are your thoughts on how builders and developers can address affordability and supply issues.
I believe the housing shortage is a farce - there is no housing shortage - there is an affordability issue and an inventory issue - but there is plenty of housing. The same was being said 15 years ago and we went from this huge shortage to being able to pick almost any home you wanted for 4 years and we were not building anything.
I agree.. just look at any large mid west or rust belt metro.. there is a ton of houses avaliable the question though will folks buy in certain neighborhoods where inventory is readily avaliable you can buy existing in many of these markets for far less than new builds..
so to me its really a neighborhood issue a school issue a crime issue etc etc.. Quote from @Devin James:
In 2021, we saw buyers upgrading to larger homes, taking advantage of 3% interest rates to afford an extra 300+ square feet.
Today, smaller homes are selling much faster as higher rates make additional square footage less affordable.
While rates are historically average, I don’t see them dropping significantly. Combine that with America’s housing shortage, and the solution becomes clear:
We need to build more homes that align with what buyers can afford. That is smaller units built with higher density to make the numbers work for both buyers and builders.
Adapting to these challenges isn’t easy, but it’s necessary to keep up with the market.
What are your thoughts on how builders and developers can address affordability and supply issues.
Hi Devin,
Have you ever considered that instead of America needing smaller homes that are more affordable, that America needs more higher paying jobs so that people can live the actual American dream versus having to settle for less and less and less (Has George Carlin pointed out in his classic speech about this).
Just my 2 cents.
- Developer · Orlando, FL · Member since 2018 · 502 posts · 306 votes1yHey Scott,
Quote from @Scott Mac:
Quote from @Devin James:
In 2021, we saw buyers upgrading to larger homes, taking advantage of 3% interest rates to afford an extra 300+ square feet.
Today, smaller homes are selling much faster as higher rates make additional square footage less affordable.
While rates are historically average, I don’t see them dropping significantly. Combine that with America’s housing shortage, and the solution becomes clear:
We need to build more homes that align with what buyers can afford. That is smaller units built with higher density to make the numbers work for both buyers and builders.
Adapting to these challenges isn’t easy, but it’s necessary to keep up with the market.
What are your thoughts on how builders and developers can address affordability and supply issues.
Hi Devin,
Have you ever considered that instead of America needing smaller homes that are more affordable, that America needs more higher paying jobs so that people can live the actual American dream versus having to settle for less and less and less (Has George Carlin pointed out in his classic speech about this).
Just my 2 cents.
I don’t disagree with you at all
My perspective is shaped by what I know best: Housing. That’s why my original post focuses on what can be done within that space to address affordability. I’ll leave the higher-paying job solutions to the experts in that field, but I do believe both sides are important to address the larger issue.
I appreciate your insight!
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Devin James:
Hey Scott,Quote from @Scott Mac:
Quote from @Devin James:
In 2021, we saw buyers upgrading to larger homes, taking advantage of 3% interest rates to afford an extra 300+ square feet.
Today, smaller homes are selling much faster as higher rates make additional square footage less affordable.
While rates are historically average, I don’t see them dropping significantly. Combine that with America’s housing shortage, and the solution becomes clear:
We need to build more homes that align with what buyers can afford. That is smaller units built with higher density to make the numbers work for both buyers and builders.
Adapting to these challenges isn’t easy, but it’s necessary to keep up with the market.
What are your thoughts on how builders and developers can address affordability and supply issues.
Hi Devin,
Have you ever considered that instead of America needing smaller homes that are more affordable, that America needs more higher paying jobs so that people can live the actual American dream versus having to settle for less and less and less (Has George Carlin pointed out in his classic speech about this).
Just my 2 cents.
I don’t disagree with you at all
My perspective is shaped by what I know best: Housing. That’s why my original post focuses on what can be done within that space to address affordability. I’ll leave the higher-paying job solutions to the experts in that field, but I do believe both sides are important to address the larger issue.
I appreciate your insight!
there has been a lot of talk in the industry about building multi generational housing.. I have one floor plan in my project that is set up for this.. out of 90 homes we have built we only sold 4 of them . same with big work space IE everyone is going to work at home.. Just not as popular as folks think - 1yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votesI think there is a balance. Many people want to start where their parents currently are and want higher end finishes. People need to be realistic about what they can afford and be willing to compromise (ie maybe they need to move to a less expensive area). In some of the big cities (speaking in Canada), you have people who want to live in Toronto or Vancouver, but they can't afford the rent with their lifestyle...and they don't want to move. I get tired of people saying, but you have A, B and C. What they don't get is I have those because I made a decision to put my money towards those and didn't do X, Y and Z that they did (eg a fancy vacation every year). One of my best friends thinks I'm rich and while I may have more than she does, I she was earning more than me for a lot longer (I make more than her now) but she spent her money on $6K vacations.
Quote from @Scott Mac:
Quote from @Devin James:
In 2021, we saw buyers upgrading to larger homes, taking advantage of 3% interest rates to afford an extra 300+ square feet.
Today, smaller homes are selling much faster as higher rates make additional square footage less affordable.
While rates are historically average, I don’t see them dropping significantly. Combine that with America’s housing shortage, and the solution becomes clear:
We need to build more homes that align with what buyers can afford. That is smaller units built with higher density to make the numbers work for both buyers and builders.
Adapting to these challenges isn’t easy, but it’s necessary to keep up with the market.
What are your thoughts on how builders and developers can address affordability and supply issues.
Hi Devin,
Have you ever considered that instead of America needing smaller homes that are more affordable, that America needs more higher paying jobs so that people can live the actual American dream versus having to settle for less and less and less (Has George Carlin pointed out in his classic speech about this).
Just my 2 cents.
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