Been a while since I wrote about the housing market. Maybe because it’s my day job and I prefer to blog about other interests, but I have been working on an op-ed about the current state of the housing market and what I believe is the cavalry that is keeping it strong. Here is an excerpt:
“There’s been a lot of speculation and talk about the current state of the housing market and how we are starting to see a slowdown as people adjust to higher mortgage rates and the economy shows signs of slowing down. Housing’s impact on people’s wealth and the overall economy is well documented. And while some companies are retreating out of fear that real estate is heading toward another market freefall, we have a much different point of view. Unlike in 2008, the economy is fundamentally strong, jobs are abundant, and incomes are trending upward. Yes, there continues to be upward pressure on pricing due to the limited availability of new housing and existing-home inventory, but like other assets, the law of supply and demand determines value, and in real estate today, demand continues to outpace supply. Bottom line: As long as there is a consistent and expanding flow of qualified buyers, the real estate market will remain strong over time.
Looking ahead, traditional drivers of growth are less clear. America’s Baby Boomer Generation is rapidly aging into retirement years leading to a diminishing work force, slower economic growth and fewer move-up homebuyer transactions. However, with a closer look under the hood, America has one substantial and perhaps undervalued asset, that several other industrialized countries currently wish they had; a younger, increasingly educated Hispanic population that has the highest workforce participation, a passion for homeownership, and who out indexes the general population in terms of social media and mobile technology usage”.
Each year, NAHREP releases the State of Hispanic Homeownership Report, which chronicles the impact of Hispanics in the housing market. My expectation is that this year’s report will be even more interesting than previous years.
It has been long understood that a nation of stakeholders makes for a strong union, and for that reason, closing the minority homeownership gap has been a goal and a topic of discussion for decades.
Between 2008 and 2012, more than six million people lost their homes to foreclosure, property values lost almost 40%, and non-distressed home sales fell to all-time lows. It was, without question, the worst real estate market since the great depression. Not surprisingly, the historic dip in the market was followed by a decade-long bull market, the likes of which we have never seen before. Residential real estate is a cyclical market. The...
There is a saying that goes “when the tide rolls back, you can see who is swimming naked”. When the market is strong, it covers a lot of weaknesses. With interest rates moving up, inflation on the rise, and the economy heading towards a possible recession, we’ll find out soon how solid the foundation of the real estate market has been, and more importantly, which companies and agents have built a strong, recession-proof business.