Austin Real Estate Guru

Demystifying real estate with a cutting edge market commentary on housing trends in the Booming Greater Austin market. As Navigators of town for over 3 decades, we unravel the mystery behind the purchase and sale process. It is our hope to serve as a leading light and offer swift real estate insights to lead you to a happy dwelling place that benefits you for years to come.

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Austin Real Estate Guru

The Housing Shortage

April 27, 2021 • Lisa Marie Contaldi • Season 1 • Episode 8

0:00 | 6:21

I'm Lisa Marie Contaldi, and my family has proudly called Austin home since the late 80s. Over the course of my career. I've had the privilege of celebrating 100s of success stories, helping buyers and sellers create memorable housing experiences while reaching their financial goals.  We've all witnessed the incredible transformation of a rapidly evolving housing market in Austin. With change comes opportunity. So, is it time for your next move?  Follow me on YouTube at Lis

WE ARE knowledge brokers offering an authentic ongoing conversation that will develop your natural intelligence in real estate and other endeavors.
http://lisacontaldi.com

THE HOUSING SHORTAGE

In this episode I want to tell you about the

THE HOUSING SHORTAGE and the factors driving demand in todays market

WHY DO WE HAVE A SHORTAGE?

WE ARE JUST NOT BUILDING AS MANY ENTRY LEVEL HOMES AS WE USED TO!

SAM KATER CHEIF ECONOMIST AT Fannie Mae brilliantly explains why

There is a fundamental shortage of homes in todays market

A good chunk of buyers in todays market are 1st timers.

WHAT IS AN ENTRY LEVEL HOME (for purposes of this discussion - 1400 sqft or less. The median single family home had about 2300 sqft per the census

Here’s the history entry level homes produced in the US

1970’s 418000 entry level homes per year on average

1980’s high interest rates (9-12%) 314000 units per year

1990’s decline in mortgage rates - increased demand single family home construction but supply of entry level homes declined to 207000 units a year

2000’s a rise in supply due to record low mortgage rates at that time and subprime products causing high demand but entry level supply of homes declined to 150000 units a year

2010’s entry level supply was at 55000 units per year

2020 entry level supply was estimated at 65000 units per year

The supply of homes constructed below 1400 sqft is at a 5 decade low

These high housing costs have hit the Millennial generation particularly hard. To overcome these cost barriers, some young adults have turned to shared living arrangements. Others have moved back home with parents. As a result, there are more than 400,000 missing households headed by 25- to 34-year-olds (households that would have formed except for higher housing costs).

Jacob Passy | Apr 16, 2021 article on new home construction Realtor.com says it all

Big picture

Pandemic encouraged many families to move to larger homes (even on outskirts)

Millennials - Having kids -prime buying years; low rates

Would be sellers are hesitant to move

Hence Homebuyers moved to new homes

Let’s talk about Housing in general because this is the

HOUSING COSTS DRIVEN UP because material costs have risen

Cost to build homes and project timelines for building

Not enough Lumber

Shortage of semiconductors (appliances)

Steel harder to Come by

SOURCES:

One of the Most Important Challenges our Industry will Face: The Significant Shortage of Starter Homes

Sam Khater is Vice President, Chief Economist and head of Freddie Mac’s Economic & Housing Research department

https://www.realtor.com/news/real-estate-news/new-home-construction-rebounds-as-america-faces-dire-housing-shortage

Jacob Passy | Apr 16, 2021