RISMedia's Real Estate Magazine

APR 2018

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

Issue link: http://remag.rismedia.com/i/958872

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Page 20 of 126

16 April 2018 RISMedia's REAL ESTATE {The NAR Power Broker Roundtable} Christina Pappas: Again this year, we find ourselves headed into the spring buying season with inventory in short sup- ply in many areas of the country, and, as prices continue to escalate, with existing inventory far more attainable for high-end buyers than for first-timers. How do we solve the need for entry-level housing? A recent story in the Los Angeles Times said that the LA County Board of Supervisors is proposing an ordinance that would require developers to include a small percentage of affordable homes in their new projects. In Silicon Valley, where the average cost of a single-family home tops $1 million, tech giant Facebook invested $18.5 million last year in a new partner- ship project designed to create regional solutions to the affordable housing crisis. Are there other, better answers? Bill? Bill Plaos: In high-priced Orange County, the average home brings multiple offers in its first few days on market, so there's no incentive for sellers to offer concessions, and not much opportunity for first-timers un- less they have lots of cash. And the student debt load many are shoulder- ing makes it tough to get financing. I know of one young man, an attorney making $180,000 a year, who can't get a loan because of his sizeable student debt. Dan Forsman: It's a daunting sce- nario. Some first-timers are getting co-signers, maybe parents who are willing and able to help. Others are having to go further out in the suburbs, where land and home prices are cheaper, or go from apartments to lower-priced condos before they can get into the single-family home they want. Helen Hanna Casey: Sometimes even condos are out of reach, at least in the city center. I'm not sure it's feasible to require developers to in- clude low-cost units, but I do believe we're not building enough, and there should be ways to incentivize them. I also think we need to encourage more homeowners to sell. We should be reaching out to empty nesters as a prime source for new listings. CP: What about focus groups working specifically on behalf of first-timers, many of whom, as Bill pointed out, are earning substantial incomes? BP: There are focus groups at every board level on the issue of affordable housing, but the options are pretty limited. The average sale price in our market is $600,000, and as for requiring builders to include low- cost units in the midst of high-end developments, builders know there's a NIMBY (Not In My Backyard) factor among luxury homebuyers. CP: What can be done to ensure that we're keeping up with the demand for affordable housing? HHC: One solution is to incentivize builders to create more master- planned communities, or attractive spaces intended to accommodate homes at different price points. DF: The rent-to-own option seems to be making a comeback. Some of our agents and clients are working with Home Partners of America, for example, which buys the house of the client's choosing and offers them a lease with the right to purchase later. It won't work for everyone, but it does offer a path to homeownership for responsible people. BP: Renting for a time is not the end of the world. It's a good way for recent grads to build credit and save the down payment. HHC: Yes, it is, but patience is not a strong suit of today's millennials. With the credit crunch finally easing, maybe lenders can be motivated to factor student loans into the mort- gage process in more practical and workable ways. CP: And those kinds of issues are precisely why we need to be talking about this in our local markets. The answers are out there and so are the buyers. It's our obligation—and it's to our advantage—to move them to the front burner. RE 8For an expanded version of this article and other NAR Power Broker Roundtable topics, please visit www.rismedia.com. Disenfranchised First-Timers: Solving the Need for Entry-Level Housing MODERATOR: Christina Pappas District Sales Manager, The Keyes Company, Miami, Fla.; Liaison for Large Firms & Industry Relations, NAR PARTICIPANTS: Bill Plaos Executive Vice President, First Team Real Estate, Orange County, Calif. Dan Forsman President & CEO, Berkshire Hathaway HomeServices Georgia Properties, Atlanta, Ga. Helen Hanna Casey CEO, Howard Hanna Real Estate Services, Pittsburgh, Pa. The Power Broker Roundtable is brought to you by the National Association of REALTORS® and Christina Pappas, NAR's Liaison for Large Firms & Industry Relations. Watch for this column each month, where we address broker issues, concerns and milestones.

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