The affordability crisis that is breaking America

While the stock market may be hitting new highs. It doesn't have a direct correlation to the bigger issue we still face in America. The cost of living is actually becoming a bigger issue with the markets rise creating a bigger spread between those who can, and cannot, afford to keep up with the rising cost of living. The Affordability crisis is here. The cost of living, and access to affordable housing are still a significant and growing vs shrinking issue for most Americans. We have decided to take a new TruVest approach in moving beyond affordable housing to a "sustainable housing" approach. Which takes a contemporary holistic vs black and white approach to address the housing crisis in relation to the growing affordability crisis we are "all facing.

The following article is an in-depth look at a critically important socio-economic issue that's not getting enough light in relationship to the things that truly matter. We look forward to your thoughts in the comments. We want to hear about your relationship with the affordability crisis.

In one of the best decades the American economy has ever recorded, families were bled dry.

By ?For The Atlantic

In the 2010s, the national unemployment rate dropped from a high of 9.9 percent to its current rate of just 3.5%. The economy expanded each and every year. Wages picked up for high-income workers as soon as the Great Recession ended, and picked up for lower-income workers in the?second half?of the decade. Americans? confidence in?the economy?hit its highest point since 2000, right before the dot-com bubble burst. The headline economic numbers looked good, if not great.

But beyond the headline economic numbers, a multifarious and strangely invisible economic crisis metastasized: Let?s call it the Great Affordability Crisis. This crisis involved not just what families earned but the other half of the ledger, too?how they spent their earnings. In one of the best decades the American economy has ever recorded, families were bled dry by landlords, hospital administrators, university bursars, and child-care centers. For millions, a roaring economy felt precarious or downright terrible.

Viewing the economy through a cost-of-living paradigm helps explain?why roughly?two in five American adults would struggle to come up with $400 in an emergency so many years after the Great Recession ended. It helps?explain why?one in five adults is unable to pay the current month?s bills in full. It demonstrates why a surprise furnace-repair bill, parking ticket, court fee, or medical expense remains ruinous for so many American families, despite all the wealth this country has generated. Fully one in three households is classified as ?financially fragile.?

Along with the rise of inequality, the slowdown in productivity growth, and the shrinking of the middle class, the spiralling cost of living has become a central facet of American economic life. It is a crisis amenable to policy solutions at the state, local, and federal levels?with all of the 2020 candidates, President Donald Trump included, teasing or pushing sweeping solutions for the problem. But absent those solutions, it looks certain to get worse for the foreseeable future?leaving households fragile, exacerbating the country?s inequality, slowing down growth, smothering productivity, and putting families? dreams of security out of reach.

The price of housing represents the most acute part of this crisis.

In metro areas such as the Bay Area, Seattle, and Boston, severe supply shortages have led to soaring prices?millions of low- and middle-income families are no longer able to purchase centrally located homes. The median asking price for a single-family home in San Francisco?has reached $1.6 million; even with today?s low-interest rates, that would require a monthly mortgage payment of roughly $6,000, assuming that a family puts down the standard 20%. In Manhattan, listings for sale?now ask an average of nearly $1,800 per square foot.

The housing cost crises in the Bay Area and New York might be the country?s most obscene. But the problem is national, driven by a combination of stagnant wages, restrictive building codes, and underinvestment in construction, among other trends. Home prices are rising?faster than wages in roughly 80% of American metro regions. In 2018, housing affordability declined in every one of the 160-some urban areas analyzed by?the National Association of Realtors, save for Decatur, Illinois. Rising prices and housing shortages are squeezing families in?Reno,?Minneapolis, and?Phoenix.

The problem now even extends to?rural?areas, where income growth?has lagged?in the post-recession period. A recent report by the Pew Charitable Trusts?found??sizable? increases in the number of households spending half or more of their income on housing in rural counties across the country. The housing crisis is hitting Bertie County, North Carolina, and Irion County, Texas, too.*

One central effect of the housing-cost crisis has been to turn the United States into a country of renters. The homeownership rate has fallen from a peak of nearly 70% in the mid-aughts to under 65 percent today; the numbers are more acute for Millennials, whose homeownership rate is 8 percentage points lower than that of their parents at?the same age. Unable to buy, roughly 3.5 million younger families have?kept renting?delaying the Millennial and Gen X cohorts? wealth accumulation, thus consigning them to worse net-worth trajectories for the rest of their lives. And renting, for many families, is not affordable, either: Nearly half of renters are facing uncomfortable?monthly bills, and the cost of renting has risen faster than renters? incomes for a full 20?years now. >>> READ MORE HERE


The Home Seller?s To-Do List for 2020

As the new year takes its first steps, the real estate business is closely analyzing 2019 to see what 2020 will bring. There were some pretty exciting developments last year, and they?ll definitely play a major role in the future. In fact, some trends, like those that SpendMeNot?s real estate market research noted, will be pivotal for anyone looking to sell this year.

So what will it take to turn the real estate market in your advantage as a property seller in 2020? Here?s a useful and to-the-point guide to tell you exactly that.

Prepare for Slow Growth of Home Prices

In line with the growth we?ve seen thus far, house prices should be increasing somewhat in the current year. This growth probably won?t be all that radical, measured at 2.8% by some estimations, but it will nevertheless impact the way you go about your job.

One consequence that you can look forward to is the fact that you?ll probably be making more of a profit. Though not an amazing rate, a bit shy of 3% is nothing to scoff at.

That said, you won?t be overjoyed when you hear that you probably won?t see as many offers as you could have in 2019. An increased price will unavoidably narrow down the amount of people that can afford to make an offer you?ll be satisfied with.

Overall, it?s a bit of a give-and-take situation where you need to take advantage of both the good and the bad. The best way to do that, in this case, would be to make your house stand out as much as you can. In the highly discriminating market we?re looking at right now, a property with more to offer will get a lot more attention from buyers.

Facts About?Housing Data

  • 50% of buyers?found their home on the internet
  • 5.34 million existing homes were sold in 2019
  • The US housing market was worth?$33.3 trillion?in 2018
  • Sales of existing homes will fall?1.8% from 2019
  • The cost of renting has gone up by?66%
  • 6% of younger millennials were first-time homebuyers

Cater to Today?s Main Buyers: MIllennials

Millennials (people born roughly between the 1980s and 2000s) currently represent the majority of home buyers. How large a majority? As many as 67% of all buyers come from this generation.

What does this mean for you? Well, it means that, if you want results, you will need to adjust the way you sell. Here are a few pointers to help you do that.

 

  • Highlight certain features that they?re on the lookout for. Garage storage, patio, laundry room, and hardwood front exteriors are among the popular home features for millennials, but there are plenty more, so don?t worry if your property doesn?t have those. Highlight the ones that it does have, though, and you?ll quickly see more interested parties.

  • Make sure that your online listings are high-quality. Practically everyone (especially millennials) relies on the internet to find whatever they need, and homes for sale are no exception. Therefore, anything you have about your property online should be updated and looking sharp - high-quality photos and a video recording of the place will get you a long way.

  • Emphasize qualities other than square footage. Nine times out of ten, given a choice between a large house and one that?s near good schools or has a good commute, millennials will choose the latter. As long as you make these perks a priority to emphasize, you?ll do great.

Expect Low Mortgage Interest Rates, but Don?t Count on Them

Last year, mortgage interest rates fell under 4% for common kinds of loans. For 2020, the trend will likely remain the same, and this rate shouldn?t go anywhere above 3.7%. That said, interest rates can fluctuate depending on economy shifts, so it isn?t a prophecy set in stone.

For you, a low interest rate will translate into more interest from people. It?s only logical, after all, since they will have to pay less overall in these conditions. But there?s little guarantee that the rate will stay as is, so be prepared for the opposite.

Should the interest rate rise, you?ll see plenty of prospects beginning to hesitate, so you?ll likely be in a bit of a bind if you?re pressed for time to sell that house of yours. It could theoretically swing either way, but the chances are that the rates will stick to their current estimates.


Affordable Housing Project Aims to Revitalize Jacobsville Neighborhood on 44 News

Our affordable housing collaboration officially launched in?Evansville, Indiana?with Mayor Lloyd Winnecke?and?Evansville Promise Zone. We are thrilled to have such amazing coverage by?44News?on how we are making an impact on families quality of life by owning a TruHome.

The Promise Zone and a company called TruVest are partnering to not only create affordable housing in Evansville but also create homeownership opportunities for the people living there.

Instead of knocking down homes, and building new ones, TruVest is renovating blighted homes in the Jacobsville neighborhood. At the same time, those who need affordable housing will have the opportunity to actually own homes instead of renting them.

This partnership will help provide first-time homeowners with the tools they need to keep their credit up, continue to pay mortgage payments and all the other things that go into owning a home.

TruVest co-founder Peter Bordes says, ?We?re going to find a balance between what we renovate, and then what we do helping the land bank taking those empty lots, and then developing new homes on them, but always with the idea that we?re not looking to gentrify neighborhoods, and we?re not looking to make the prices go up. We want to be able to keep them in line with the integrity of the neighborhoods.?

Mackenzee Pagett and her two children will be moving into this first house within the next few weeks. She tells 44News Evansville she?s very excited being a first-time homeowner.


September carries greatest single-month-default surge in a ten-year period

Home loan defaults rose in September, producing the most extensive single-month-default increase in many years.

Defaults accelerated to 13.2% in September, the most substantial month-to-month increase since November 2008. This increased the nationwide default rate to 3.97%.

Generally, the month of September experiences an increase in defaults. Of the most recent 19 Septembers, 16 experienced increases, which brought the average default rate to 5.2%. This is the biggest jump in defaults for any single month.

UNCOVER MORE REAL ESTATE TRENDS

The 2nd variable that generated an increase in defaults was the fact that the calendar month finished on a Sunday, which generally causes a tremendous burden on defaults.

Moreover, Hurricane Florence, which swept the Eastern United States in September, impacted defaults to an increase of 38% month-over-month in the States it affected. Currently, more than 6,000 homeowners are delinquent as a result of being affected by the hurricane.

Foreclosures dropped 15.1% from August to virtually an 18-year low. This was actually down 11.5% from September 2017. The month's double-digit decrease brought foreclosed properties to 40,000 for the month.


Is There a Shortage?

I hope you had a productive week.

For some reason this week there was a ton of articles on the spring housing shortage. Is there truly a shortage? Or have our expectations gotten out of control? Can you spend a little more time finding a house that needs some "TLC" in a good neighborhood? On the other side of the equation, mortgage rates are going up, but rates are still respectable to where homeownership is not out of reach. I know from our perspective that some markets are tighter than others, but we are always able to find houses to purchase.

Is there a shift in mentality needed for homebuyers that are entering the market this year? I would like to hear your thoughts on the topic. Until next week, let's all be part of bringing Wall Street to?YOUR?Street! Have a great week and I look forward to speaking with you soon!


Transparency = Caring

I hope you had a great week!

For the past few weeks, we have been finishing up one of our properties in Indiana.

We have agreed to sell it with owner financing to a local family. This family has a special needs child. We were supposed to close the transaction this week, but there was an emergency with their child to where they had to take him to OH for surgery. We had the family scheduled with our Title Company to sign documents and close. With this emergency, they could not close and the Title Company charges a fee for "No-Shows". I was able to talk to our title representative and explain the situation. She was very thoughtful and wiped out the fee. She then told me that when the family comes in to close next week she had a few gifts she wanted to give them. It really touched me, and I thanked her many times. She said something that reminded me why I am in the business " Ryan, we all go through tough times in life, and if we cannot help one another why are we on this planet".

One of the core values we live by is "Doing The Right Thing". This situation definitely falls into that category! I am really excited to get this family?into?their home next week! I will share some pictures with you once we get them in.

 


Creating Value Means What.....

Earlier this week I spoke with a good friend about how he handles his LinkedIn account and online experiences. He told me that the majority of his connections were just looking to quickly sell him goods and services, without even taking any time to build a proper business relationship with him. What he told me really hit home, as I then realized that I was also having the very same experience with many of my own LinkedIn connections.

This approach is just not acceptable to me. I personally believe that for any mutual business relationship to be successful and of VALUE, a bond of trust should first be established..In doing so, any and all questions could be discussed as we learned about each other?s business processes and services. I am currently growing my business organically, and wish to provide you and other select LinkedIn connections VALUE. Is there something mutually beneficial that we can work on together? Does this interest you in any way? Please let me know how you feel about this idea.

 

 

 


What a Week!

This past week was full of so many emotions! We commenced beta testing for our due diligence platform, and also purchased 2 assets in Indiana. The launch of the platform by far has been the toughest challenge I have faced in my career. I am very thankful for my family, colleagues, and friends that have supported me on this journey. Now the next chapter of this journey starts this week with implementing feedback from the beta testers, creating the new website for TruExchange, and throughout the week I will be sharing our progress on our recent acquisitions.?Let's all be part of bringing Wall Street to?YOUR?Street! Have a great week and I look forward to speaking with you soon!