The American dream has always been homeownership. Homeownership provides stability and a sense of pride. For many years the dream of owning a home has been fraught with obstacles due to economic uncertainty and unavailability of space. The demographics of the population have also been a changing factor in homeownership in some ways. This factor, along with the other factors provides a good insight into the housing market as a whole.
Home Ownership vs Renting
The attractiveness of renting instead of being committed to homeownership is one of the biggest changes seen in the housing market. The main reason why renting has become so attractive is the fact that most people looking for a new place to live don’t have the means to buy a home. Potentially plummeting home values are another good reason why more people are deciding to rent rather than own a home.
Homeownership however is still a good investment for those who can afford to put the down payment on a house and get approved for a home loan. With homeownership you can build equity in the home that you may be able to tap at a later time. Homeownership also may allow you to save some money that you might have spent on rent.
Housing Shortages-A Reality for Low Income Families and Individuals
The biggest element of change in the housing market is the unavailability of affordable housing. This crisis brought on by economic uncertainty and by the changing demographic in inner cities and their environs is due to a number of factors. These factors include the subtle and not too subtle persuasion tactics utilized by developers to push out undesirables.
Cities understandably want to attract rich and upper class clients to their developments. Some developers are taking the lead from successful “listings” that has left many families homeless and on the streets. Homelessness is an increasing problem for many low income families and individuals who are being priced out of their apartments and homes.
This trend will continue if something is not done to correct it soon. There is a glut of expensive apartment housing now, but unfortunately with this “pricing out” no one can afford them.
Possible Solutions-Analysis of Change in the Housing Market
It is important to note that these elements of change that were created during what is now referred to as the Great Recession can be reversed. For homeowners what this means is that an increased awareness of the available resources can be achieved. There are many ways to enhance the viability of homeownership and make it more affordable.
One of the ways is to work out a compromise that restores older buildings that can still be utilized as affordable housing. At the present time many developers are still not seeing the potential that these older and still beautiful houses have.
Smart development utilizes the resources already available through these older buildings and the potential for creating beautiful affordable housing for all.
Another possible solution is to level the housing “playing field” and create an equality that allows lower income and middle income families to own homes in safe communities. Affordable housing is necessary for the continued growth of communities nationwide.
Increase in Urban Living vs Suburbia
One analysis of change that has been prevalent is the fact that construction of single family units have decreased in the long term. This is primarily due to an increasing interest in urban living and the fact that many families have been priced out of the housing market.
Many homeowners are deciding to take the FSBO approach in order to avoid the realtor fees and to downsize their homes to move into the city. This saves money but there is risks involved with the “do it yourself” real estate selling. This element of change however is the most noticeable change in the housing market.
As we can see, there have been many changes in the housing industry, especially in recent years. There are, however, many actions that can be taken, given your current situation, in order to take the most advantage of future trends.
By: Mark Palmer