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When Will A Home Be Affordable Again? - YouTube
Channel: Kristina Smallhorn
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when it comes to affordable housing
[1]
crisis people think i'm totally insane
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but let's just look at a simple
[5]
statistic i can pull up from any google
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search anywhere
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and then you can't even argue with this
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in 2011 the average american income was
[13]
about 50
[14]
000 just a hair over in that same year
[17]
the median house cost two hundred and
[19]
fourteen thousand dollars
[20]
that economic divide is even bigger now
[23]
in 2021
[24]
the median income has only increased
[27]
eighteen thousand dollars which seems
[28]
like a lot but it's really
[30]
not when you look at how much the median
[31]
house costs the median house
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right now is 389 thousand and 400
[37]
dollars
[37]
and it's expected to go up to over 408
[41]
thousand dollars it's almost 100 000 shy
[44]
of a half a million dollars
[46]
to buy the average home in the united
[49]
states
[50]
if that's not an affordability crisis i
[52]
don't know what the heck is
[53]
so today we're going to be talking about
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what's causing the affordability crisis
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because everybody likes to do a lot of
[58]
finger pointing but i'm going to show
[60]
you the real facts of what's really
[62]
going on
[63]
and i'm going to give you some solutions
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that i've come up with along the way
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according to keeping current matters and
[68]
black knight there are six states that
[70]
are currently unaffordable and haven't
[71]
been affordable for homes for over 25
[74]
years
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that's arkansas iowa kentucky
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louisiana maryland and west virginia
[81]
so why are houses becoming so much less
[83]
affordable
[84]
well there's a few reasons one of the
[86]
reasons is because of the start of the
[88]
pandemic
[88]
the fed went ahead and dropped the
[90]
interest rates to historic low levels
[93]
and that increased the amount of people
[95]
that were interested in purchasing
[96]
especially if they were thinking about
[97]
moving out of the city to get more of a
[99]
rural area since they were working from
[101]
home anyways
[102]
and many employers have even said they
[104]
could work from home until after the
[106]
the pandemonium the pandora whatever you
[109]
want to call it so that in turn
[110]
went ahead and increased it on many
[112]
people that were really interested in
[113]
moving to more
[114]
rural areas and of course that made
[117]
rural areas that were generally
[118]
actually pretty affordable become a lot
[121]
more expensive like 20 to 25
[124]
especially in areas of texas austin
[126]
texas i think is of at least 25
[128]
right now because a lot of home sellers
[130]
weren't really interested in selling
[131]
during the time
[132]
of a pandemic can't really blame them
[134]
but it also caused
[135]
the affordability crisis to blow up out
[138]
of control
[139]
and it didn't help that homebuilders
[141]
weren't building
[142]
this report though came with a warning
[144]
construction costs now up 12 percent
[146]
from a year ago
[147]
not just pushing home prices higher but
[149]
nahb's chief economist rob dietz said
[151]
some builders are slowing sales to
[153]
manage their own supply chains which
[155]
means growing affordability challenges
[157]
for a market in critical need
[159]
of more inventory so after the last
[161]
housing crash in 2008
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2007 whenever you want to say it
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officially started because there was so
[166]
much speculative home building during
[168]
that time
[168]
a lot of home builders lost their rear
[170]
end and they were like we are not doing
[172]
this again
[173]
instead of building 30 speculative homes
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we're only gonna build about three to
[176]
ten
[177]
and then they would write contracts on
[178]
new builds as long as they were holding
[180]
a deposit
[181]
which ended up being a terrible thing
[182]
during this pandemic because there were
[184]
so many people that really wanted to get
[185]
into
[186]
a brand new house or any house for that
[188]
matter another thing that worked against
[189]
the home builders was
[190]
even if they wanted to build a home they
[192]
couldn't find the building supplies
[194]
in 2020 as more shipments were blocked
[197]
in
[197]
all these ports you know i don't know if
[199]
you know this the ships actually have to
[200]
sit in the harbor
[202]
for 10 days before they can actually
[203]
unload everything it's like their own
[205]
quarantine time
[206]
which is causing a major delay and of
[208]
course as things get delayed the supply
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goes down
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and then building materials start
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costing a lot more matter of fact
[214]
a home that used to cost ten thousand
[216]
dollars to frame up
[218]
is now over thirty eight thousand
[221]
dollars
[221]
to frame up the same exact home just
[224]
because
[225]
of the framing and how much lumber costs
[227]
it isn't just the cost of the lumber
[229]
it's still the cost of the roofing
[231]
supplies it's the cost of appliances
[234]
it's the cost of hvac systems everything
[237]
has increased
[238]
so a home that a builder would have sold
[239]
a year ago for 200
[241]
000 with market conditions the way they
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are they could be selling for almost 500
[246]
000 depending on where you live
[247]
now cold-hearted economists will tell
[249]
you we don't have an affordability
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crisis
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we have an affordable rental crisis
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because they
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say they say that most parents
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don't really want to buy a house they
[260]
want to rent which i think is total
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hogwash
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and their suggestion to fix the problem
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is to basically build
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more rental units and apartments for the
[268]
average american to live in
[269]
why is this okay to have middle america
[271]
in rental units
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not the american dream that i remember
[275]
so at the beginning of the pandemic we
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already had a housing affordability
[278]
crisis there was
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already almost 8 million americans that
[281]
couldn't find affordable housing
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and now that number is going to continue
[284]
to grow as the home prices continue to
[287]
grow throughout the summer
[288]
there just isn't enough homes on the
[290]
market to satisfy how many buyers are
[292]
looking to purchase one
[293]
they still have been predicting that
[295]
more houses are going to be nearing the
[296]
market
[297]
and hopefully that will drive the prices
[298]
down so i know a lot of people
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that are looking for more affordable
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housing options are looking for the
[304]
answers in a housing crash
[306]
i've talked to many real estate agents
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throughout the country and i speak to
[309]
them every single sunday
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and every guest i've had on said we are
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not going to be seeing a crash
[314]
anytime soon the people that say it's
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going to crash
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i'm like based on what right
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everyone is kind of predicting this 2007
[325]
2008 to reoccur and it very well might
[328]
be
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but it's not going to happen for the
[331]
same reasons that caused it back then
[333]
it's going to have to be for entirely
[334]
different reasons you know back then as
[337]
it was really easy to get into a loan i
[338]
mean anybody could get into a house and
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even people that couldn't afford the
[342]
houses
[343]
um the houses were being over built and
[346]
and uh
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then there was all the shenanigans going
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on in the secondary market
[350]
and that type of stuff doesn't exist
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today right
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i would say the last 12 13 years the
[355]
lending guidelines have been super
[357]
strict
[357]
it's probably the best book of business
[359]
that banks have written and
[360]
ever in history this last decade so the
[363]
the paper is really strong
[366]
and there's not a bubble to burst at the
[368]
moment like there's not
[369]
enough housing available so you know
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to that point that the market is going
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to crash it very well might
[377]
but i don't see what's actually going to
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cause it yet
[380]
and at the beginning of the pandemic i
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genuinely thought there was going to be
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a housing crash but that's before
[385]
the congress decided to pass all these
[387]
forbearances
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and if you don't know what forbearance
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is is when the mortgage company
[393]
allows the borrower to take the payments
[395]
that they would normally be paying that
[396]
month
[397]
and tack those on to the end of the loan
[399]
so they can extend
[400]
out the length of the time that they
[402]
have the loan
[404]
with no penalty so if you had a 30-year
[406]
mortgage and you didn't pay your
[407]
mortgage for
[408]
a year those payments would go ahead and
[410]
be attacked to the end of the year
[411]
and there would be no penalty to you as
[413]
a borrower it's a great plan for
[415]
someone that already owns a home but if
[417]
you were waiting for a big windfall of
[418]
foreclosures
[419]
that isn't going to happen it's a flash
[421]
headline
[423]
so mortgage forbearance drops 4.36 and
[425]
this is another one
[426]
uh from housing wire and this is alex
[429]
roja
[430]
the downward trend of borrowers and
[431]
forbearance picked up speed
[433]
in the last week of april falling 11
[435]
basis points to 4.36
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that is the 10th consecutive week of
[440]
decreases
[441]
and it reflects a faster rate of exits
[443]
and a steady
[444]
low level of new requests but this is a
[447]
great sign of
[448]
people going back to work either got a
[449]
new job or are back from
[451]
um you know a furlough or whatever may
[453]
have happened to them and they're back
[454]
to it so
[455]
those numbers declining is obviously
[457]
good things as it stands right now as of
[459]
june 30th
[460]
2021 the forbearance program through the
[463]
government is supposed to
[464]
expire but they can still file for
[467]
forbearance
[468]
all the way up till june 30th and even
[470]
if they file on june 30th they can
[472]
still extend that out for another
[474]
additional six months
[476]
with that being said let's just say that
[479]
these people didn't pay the whole entire
[481]
year
[481]
june 30th comes around they don't extend
[483]
it and they go into foreclosure
[486]
that process to foreclose on those
[488]
people is going to take
[490]
a minimum of 400 days minimum
[493]
of 400 days and it can take months even
[496]
years for those to foreclose on
[498]
so if you're waiting for a big wave of
[500]
foreclosures
[501]
it's not going to happen this year and
[503]
it's not going to happen
[504]
and probably the next two years so if
[507]
that's the affordable housing solution
[509]
for you
[509]
you may want to reconsider so what are
[511]
some solutions to the problem
[513]
well after world war ii they made a big
[515]
gi bill
[516]
they allowed for soldiers to come back
[517]
from the war and be able to have a
[520]
low interest mortgage to buy a very
[522]
small home
[523]
and many gis did this is how a lot of
[525]
baby boomers increase their wealth and
[527]
how did they build those houses so fast
[529]
modular construction and it was so
[532]
popular
[532]
then even people were building houses
[535]
from sears and roebuck i've even talked
[536]
about that on my channel before too
[538]
but now for some reason people have a
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negative connotation of what a modular
[542]
home truly is
[543]
i'm here to tell you it's no different
[544]
than a traditional built home they're
[546]
built to the same specifications that
[548]
you would get on a traditional build
[549]
home
[549]
it just so happens that a lot of the
[551]
pieces are pre-cut
[552]
and put in a box and shipped to the
[554]
house at one time which is really great
[556]
because you wouldn't have to have the
[558]
building delays that it would take with
[559]
a traditional built home
[560]
this would also be super affordable for
[562]
home builders because they wouldn't have
[564]
a delay
[564]
on building materials with a lot of
[566]
modular homes they don't even have to
[568]
like
[568]
put them together like you would a
[569]
traditional built home sometimes they're
[571]
already half put together like the
[572]
panels of the walls are already put
[574]
together so they're connecting them
[575]
together almost like legos
[577]
again making this a lot quicker for the
[579]
home builder to put a house together
[580]
there's another type of home which is
[582]
called a kit home which is a traditional
[584]
built home
[584]
and it's brought in and by panels it's
[586]
very similar to modular
[588]
and it's built to traditional home
[590]
standards as well
[591]
again this would be super inexpensive
[593]
for a home builder to do because
[595]
everything's done
[596]
in one-stop shop the other big cost of
[598]
building a home is of course the land
[600]
so if an area was super serious about
[602]
trying to find more affordable
[604]
housing options they could sell home
[606]
builders some of the unused public land
[608]
or they could re-zone a lot of the
[610]
commercial areas that are not being used
[612]
and haven't been used for years
[614]
and what if an area was able to rezone
[616]
that and make it get residential and
[617]
then put zero lot line homes
[619]
and allow for these smaller modular
[621]
houses to go in and use that space for
[623]
residential
[624]
affordable housing options instead of
[626]
sitting there vacant it's a plus for the
[628]
area because you're getting more tax
[629]
dollars because people are paying
[631]
property taxes
[632]
it's a great way to use unused space
[635]
especially in commercial areas as more
[636]
and more people
[637]
are deciding to buy things from home and
[639]
no longer traveling in their cars
[641]
to get to residential storefronts now
[643]
there's one more housing solution
[645]
that has happened throughout the united
[646]
states and that is turning old malls
[649]
into condominiums
[650]
they have the space they have the
[651]
parking they have the plumbing and all
[653]
they do
[654]
is remake those storefronts into
[656]
condominiums
[657]
not only that in some of these abandoned
[658]
malls they've gone ahead and made
[660]
storefronts at the bottom like starbucks
[662]
and dry cleaning
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for the people that are living in the
[665]
condos above so it's like a win-win it
[667]
ends up being a little micro economy
[669]
inside the mall so
[670]
as more malls fold up throughout the
[672]
united states it's not a bad idea to
[674]
look at those and turn them into
[675]
affordable housing options but what can
[677]
you do right now if you're currently
[678]
looking for a home to purchase
[680]
and you're having a hard time finding an
[682]
affordable home so hud homestore.com is
[684]
one area that you can go ahead and try
[686]
to find foreclosures in your area
[688]
granted some of these are going to be
[689]
fixer-uppers but because it's had a home
[692]
store you will not be fighting against
[694]
foreign investors
[695]
or big corporations because they put a
[697]
timeline for the regular person to
[699]
purchase the house
[700]
before these foreign investors and other
[702]
investors come in this will give you an
[703]
advantage and yes they will take your
[705]
offer and work with you first
[707]
before they even give it to any kind of
[709]
investors that is a great place and
[710]
resource
[711]
that you should know about now in order
[713]
to get these homes you're going to have
[714]
to work with a hud certified real estate
[716]
agent
[716]
most real estate agents are if they're
[718]
not it just takes them a few minutes to
[720]
fill out the forms
[721]
and have their broker sign it and they
[722]
can be now it is a
[724]
contract bidding process the timeline of
[726]
getting these things done
[727]
and closed is going to take a little bit
[729]
longer but at least you get into a house
[730]
for a fair price
[731]
another great place to find foreclosures
[734]
in your area and that wouldn't even be
[735]
on the mls or even redfin or
[737]
realtor.com or any of those big ones is
[739]
foreclosure.com
[741]
matter of fact i actually found a great
[743]
investment property for one of my
[744]
investors on foreclosure.com
[746]
now just note that you're going to be
[748]
competing with other investors that are
[750]
looking at these foreclosures as well
[752]
but it's a great place to at least take
[753]
a look at them even with my affiliate
[755]
link to foreclosure.com you get a
[756]
discount for using the website
[758]
and you can use it for 30 days free so
[759]
maybe you can get yourself a house
[761]
within that 30 days
[762]
and you won't have to pay the monthly
[764]
fee i hope that's the case that would be
[765]
really good for you
[767]
and one more place you may want to try
[768]
to find a home is to look through for
[771]
sale by owner websites now when you see
[773]
a for sale by owner house that does not
[775]
mean you can't use your real estate
[776]
agent to write up a contract and
[778]
represent you in purchasing your home
[780]
matter of fact i strongly recommend you
[782]
don't do that because
[783]
if the person that's selling the house
[784]
has never sold a house before and you're
[786]
the person that's purchasing a house and
[788]
you have no idea what's going on
[789]
both of you are probably not being
[791]
represented fairly and you have no idea
[793]
what's in that contract
[794]
your real estate agent is going to be
[795]
able to put together your contract
[797]
make sure that all the disclosures are
[799]
done and you're protected all the way to
[800]
the time of closing
[802]
even if you're letting go of a lot of
[803]
contingencies in order to get your house
[805]
closed
[806]
i still would not do it without the
[807]
representation of a real estate agent
[810]
and i'm not just saying that because i'm
[811]
a real estate agent i'm telling you
[812]
because i've seen a lot of nonsense
[813]
happen and then people move in and then
[815]
they find out the house has black mold
[817]
and there wasn't anything you could do
[818]
about it because you signed all your
[819]
rights away
[820]
because you didn't know what you were
[821]
doing i know that if you've been looking
[823]
for a home for a hot minute right now
[824]
that
[825]
for the past year it's been very
[826]
difficult to find
[828]
a house and if you do find a house it
[830]
ends up being like there's
[832]
14 bidding wars on it and then the offer
[834]
that has gotten accepted
[835]
is usually tens of thousands over the
[837]
asking price
[839]
i want to share a little bit of good
[840]
news that i've seen whispers and many
[842]
posts of agents saying i can't believe
[845]
my house has been sitting on the market
[847]
for over 10 days so it's already
[849]
starting where
[850]
people are saying i'm not going to pay
[851]
that much for a house so that is a good
[853]
sign that maybe some tides are turning
[856]
and sellers are going to have to come
[857]
back to reality but like i said those
[859]
economists
[860]
have been saying that the statistics
[862]
show that it's still going to be going
[863]
up and the median price
[864]
of a home is going to be going up to
[866]
about 408
[868]
thousand dollars that still blows my
[869]
mind the fact that in about a year from
[871]
now
[872]
a house is gonna cost a half a million
[874]
dollars for the middle american to
[876]
afford
[877]
is astronomically scary but there is
[879]
solutions
[880]
we just have to work together in order
[882]
for them to happen so what do you think
[884]
is the solution to the affordable
[885]
housing crisis let me know in the
[887]
comments section
[888]
my name is christina smallhorn your real
[890]
estate whisperer and i tell you all this
[892]
because good real estate information
[894]
matters
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