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Posts Tagged ‘Baby Boomers’

Who is Choosing Homeownership?

March 9th, 2017 Comments off
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NAR headquarters. Credit: TawbaWare.

A new survey from the National Association of Realtors (NAR), shows some rather interesting statistics, and opportunities for the manufactured housing industry.

According to Furniture Today, the 132-question survey, as a part of the 2017 Home Buyer and Seller Generational Trends study, showed that “Generation X” households are buying more homes, a growing number of Millennial and younger Baby Boomer households have children living at home, and more Millennials are buying outside of the city.

The study showed that an improving economy, multiple years of strong job growth and a notable increase in home values fueled a greater share of purchases from Generation X households over the past year.

Lost in this discussion are the numerous Generation X households who bought their first home, started a family and entered the middle part of their careers only to be rattled by job losses, falling home values and overall economic uncertainty during and after the Great Recession,” said Lawrence Yun, NAR chief economist.

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Lawrence Yun. Credit: The Business Journals.

This year’s survey reveals that debt and little or no equity in their home slowed many Gen X households from buying sooner.

Yun also said that recent Gen X buyers delayed buying longer than Millennials due to debt, and were also the most likely generation to have previously sold a distressed property, and want to sell earlier but couldn’t because their home was underwater.

Gen X sellers’ median tenure in their previous home was 10 years, which puts many of them selling a property they bought right around the time home values were on the precipice of declining,” said Yun.

Fortunately, the much stronger job market and 41 percent cumulative rise in home prices since 2011 have helped a growing number build enough equity to finally sell and trade up to a larger home. More Gen X sellers are expected this year and are definitely needed to ease the inventory shortages in much of the country.

The survey also showed that the increase in purchases from Gen X buyers this year, 28 percent, was the highest since 2014 and up from 26 percent in 2016.

Millennials represented the largest group of recent buyers for the fourth consecutive year at 34 percent, but their overall share was down slightly from a year ago, which was 35 percent.

In what has been a growing trend, younger boomers reportedly considered adult children when buying, with increases in the cost of rent in many areas is prompting many middle-aged parents to buy a home with their young adult children in mind.

Younger boomers were also surveyed as the most likely to purchase a multi-generational home, with the top reason being that children over 18 years old either moved back home or never left.

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Credit: NAR.

The job market is very healthy for young adults with a college education, but repaying student debt and dealing with ever-increasing rents on an entry-level salary are forcing many to either shack-up with several roommates or move back home,” said Yun.

This growing trend of delayed household formation is one of the main contributors to the nation’s low homeownership rate.

Also of note were responses from millennial buyers, as more have at least one child and also have a need for more space.

Breaking from prior trends, only 15 percent of millennial buyers bought in an urban area, which is down from 17 percent last year and 21 percent two years ago.

Millennial buyers, at 85 percent, were the most likely generation to view their home purchase as a good financial investment,” said Yun.WhoisChoosingHomeownershipcreditMHLivingNews-postedtothedailybusinessnewsmhpronewsmhlivingnews

These strong feelings bode well for even greater demand in the future as more Millennials settle down and begin raising families. A significant boost in new and existing inventory will go a long way to ensuring the opportunity is there for more of them to reach the market.

For more from the NAR, including MHProNews and MHLivingNews Publisher L.A. “Tony” Kovach’s report on the significant opportunities for manufactured housing, click here. ##

 

(Image credits are as shown above.)

 

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

Harvard Study, Baby Boomers to Spark Affordable Housing Boom

January 17th, 2017 Comments off
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Credit: FOX Business.

As “baby boomers” eye retirement in large numbers, builders believe that they could jumpstart an affordable housing boom.

Per FOX Business, a report by the Harvard Joint Center for Housing finds that by 2035, more than one in five people in the U.S. will be aged 65 and older and one in three households will be headed by someone in that age group.

The report, entitled “Projections and Implications for Housing a Growing Population: Older Adults 2015-2035,” notes the growth will increase the demand for affordable, accessible housing that is well connected to services beyond what the current supply can meet.

Current census data shows that incomes drop significantly after the age of 75, from an average of $54,000 per year to $36,000 per year. Data also shows that this segment spends more than one-third of their income on housing.

Right now, more than 19 million older adults live in unaffordable or inadequate housing, and that problem will only grow worse in the next two decades as our population ages,” said Lisa Marsh Ryerson, president of AARP Foundation.

When asked what these numbers mean for the real estate industry, Lukas Krause, CEO of Real Property Management provided this response:

WillBabyBoomersbetheSparkforanAffordableHousingBoomcreditRealPropertyManagement-postedtothedailybusinessnewsmhpronewsmhlivingnews

Lukas Krause. Credit: Real Property Management.

People currently over the age of 55 have saved only $150,000 for retirement, per Fidelity and Vanguard estimates. This savings amount will generate only $500 per month in income, if the recommended 4% withdrawal standard is followed,” said Krause.

Social Security pays an average of $1,294 in benefits to retirees, so average monthly income will be $1,794 or $21,528 per year. If 34% – 38% is spent on housing, the average retiree will have a housing budget of $610 – $682 per month – half of todays average apartment rental cost of $1,100 per month. This means cohabitation and new forms of housing will be needed in the future.  It also means that retirees who have not already purchased a home, will be unlikely to afford one.

 

Manufactured Housing to the Rescue

As Daily Business News and MHLivingNews readers are already aware, manufactured homes provide the ideal solution to the challenges of affordable housing by delivering high quality quickly, and at significantly less cost than traditional site-built houses.

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See the video and report by clicking the image above. Photo of Lois Renquist. credit: SFChron. Text credit, MHLivingNews.

Overcoming the challenge of the stereotypes that plague the industry are now front and center in light of the rapidly retiring baby boomer population. Lois Renquist, a poet laureate who resides in the San Francisco Bay Area, has had to deal with those stereotypes in response to her recent downsizing.

I’m downsizing for the second time, and some folks think I’m ‘stepping down,’” said Renquist.

Rancho Benicia is a highly rated and gated retirement community (55 and older only), very well kept, with a pool and hot tub, a clubhouse and many activities for the residents. It’s almost crime free. It’s a mobile home park. A block from the Benicia Marina, it’s often seen as another world.

‘Trailer trash? Is that what you’ve come to?’ someone asked.

‘That’s really stepping down,’ my brother, who lives in Idaho, said.

You can find the full story, along with the story of Terry Reynolds, whose home is located in a development with conventional houses that he says range from $300,000 to $400,000, double or more what he has invested in his home. Yet visitors to his home can’t tell the difference between his residence and that of others in the same location, linked here. ##

(Editor’s note: those same stereotypes that hamper manufactured home acceptance with boomers are slowing millennials from accepting manufactured housing too, see a report, linked here.

Fortunately, their are industry leaders who seek to change those realities.  For some examples, see the new report, linked here.)

(Image credits are as shown above.)

rcwilliams-writer75x75manufacturedhousingindustrymhpronews

RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

First Look: 2017 Home Buying Season

October 24th, 2016 Comments off
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Credit: Realtor.com

According to a new report released by Realtor, the 2017 home buying season will see a significant increase in first time home buyers, high demand for suburban homes and increasing affordability issues among buyers.

The report is based on September survey data from active shoppers on Realtor.com.

Highlights from the report:

  • The aforementioned increase in first-time homebuyers, which could rise to 52 percent of all buyers next year, up from 33 percent in 2016. .
  • Issues with affordability, down payments, and credit scores are now beginning to challenge limited inventory as the top barrier to home ownership.
  • Suburban homes are most preferred, as 43 percent of first time home buyers have a stated preference for the suburbs.
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Johnathan Smoke. Credit: Move.com.

This represents an ‘oh shift’ moment in housing,” said Jonathan Smoke, chief economist at Realtor.com.

With so many first-time buyers in the market, competition will be even fiercer next year for affordable starter homes in the suburbs. Those looking to buy may want to consider a winter home purchase in order to avoid bidding wars and higher prices spurred by a potential increase in millennial buyers.

37 percent of those surveyed for the report said that their largest barrier to home ownership is the down payment and 30 percent mentioned finding a house within their budget as the primary challenge. This is in contrast to 2016, when 40 percent of home shoppers cited lack of inventory as the largest barrier to homeownership. The report says that this is due to more first time homebuyers entering the market.

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Credit: Realtor.com.

Safe neighborhoods, more living space, and larger yards top list of key home attributes.

First-time homebuyers cite safety, more living space, and larger yards as the key features for their new homes, according to the report.

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Credit: Realtor.com

In a review of millennials, reasons to purchase are driven by actual or planned growth in their families, and they show strong preference for single family homes (39 percent) or townhomes (32 percent) and away from multifamily homes (15 percent), condos (10 percent), or manufactured homes (2 percent).

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Credit: Realtor.com.

As safety is a top concern, 50 percent of first time buyers surveyed identified suburbs as their number one preferred location. For baby boomers, their desire to live in the suburbs is attributed to the desire to be close to family and friends.

Data from the report also showed younger homebuyers are more likely than older homebuyers to prefer urban living, the second-most common location preference among millennials after suburbs.

A majority of those surveyed respond that they planned to purchase at least seven months out, which makes the spring and summer of 2017 the most popular time to buy a home.  ##

(Editor’s Note: A major takeaway for this report for manufactured housing pros? Real estate agents are feeling the pinch for affordable housing, at the very time that Bloomberg, HousingWire and Fox are spotlighting the value of manufactured homes to help solve the affordablity crisis.)

(Image credits are as shown above.)

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

 

Novogradac’s Report – Affordable Housing 2046 – Does MH Hold The Key?

October 14th, 2016 Comments off
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Credits: Skyline, Clayton, Novogradac & Company.

In a new report released by CPA firm Novogradac & Company LLP, the firm talks with affordable housing industry experts about the impact of the Tax Reform Act of 1986, the Low Income Housing Tax Credit (LIHTC), and what affordable housing may look like in 30 years.

LIHTC industry experts provided their predictions about the future and what could be done to produce a positive outcome.

They see part of that future as manufactured housing.

A complete look at Novogradac’s new, special report along with manufactured housing industry commentary and the study’s download, is linked here. ##

(Image credits as shown above.)

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams for the Daily Business News, MHProNews.

Shortage of Affordable Housing Could Severely Impact 40% of Boomers

May 25th, 2016 Comments off

baby_boomers____howstuffworksWith 8,000 to 10,000 Baby Boomers hitting the 65 mark daily, a task force from the Bipartisan Policy Center, arguing that there is a link between housing and health that will impact the well-being of the country’s senior population, is urging the federal government to spur investment in affordable housing for seniors.

Comprised of former Department of Housing and Urban Development Secretary Henry Cisneros, former HUD Secretary and U.S. Senator Mel Martinez and former U.S. Representatives Allyson Schwartz and Vin Weber, the task force is recommending expansion of the Low-Income Housing Tax Credit (LIHTC) program to finance the production and preservation of affordable rental units.

As nationalmortgagenews tells MHProNews, the group recommended funding for Section 202, which provides rental assistance for seniors, and that LICHTs be used to attract funding from health care programs for services that will be needed by an older population.

The center reports in 2013 there were only 4.3 million rental homes available to extremely low-income households, but a need for housing for 11.2 million households, leaving a shortage of 6.9 million homes. With approximately 40 percent of seniors over 62 estimated to have assets of under $25,000 to sustain them over the next 20 years, the lack of affordable housing threatens to leave many possibly homeless.

Affordable housing is the glue that holds everything together,” Martinez, who co-chaired the task force, said in a news release. “Without access to affordable housing and the stability it provides, it becomes increasingly difficult to provide home and community-based supportive services that can enable successful aging.”

In order to make the necessary changes to accommodate health and accessibility needs, the task force suggests a new Modification Assistance initiative be implemented by the federal government, in conjunction with local and state governments, to utilize tax credits, grants and forgivable loans to assist the aging population.

Additionally, the group stated that HUD should create lending products that allow elderly borrowers access to home equity.

As MHProNews understands, this scenario could be an ideal situation for HUD to promote the affordable, quality manufactured housing it so vigorously regulates. ##

(Photo credit: howstuffworks–Baby Boomers)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

Baby Boomers Take it on the Chin for High Home Prices

December 4th, 2015 Comments off

baby_boomers____howstuffworksBaby Boomers are not downsizing fast enough, and by not putting their homes on the market, they are creating the inventory shortage that is driving up prices, making it tougher on would-be first-time homebuyers. This is clogging up the “whole chain of homes sales,” according to Sean Becketti, a chief economist at Freddie Mac speaking to realtytoday. Hey, blame it on the Bossa Nova.

They appear to be staying in the family home longer than previous generations,” he wrote in a new outlook report, “and the imbalance between housing demand and supply continues to boost prices.

A Federal Reserve survey of consumer finances from 2013 reveals 55 and older households control two-thirds of all home equity with a value of $8 trillion.

Patrick Simmons of Fannie Mae says there is scant evidence Boomers are leaving their “empty of nesters” homes, noting between 2010 and 2013 the number of Boomer apartment rentals remained static.

While Lawrence Yun, Chief Economist for the National Association of Realtors (NAR) points to the effects of the housing bust and recession, David Crowe, of the National Association of Home Builders (NAHB) says there’s a loopback effect of Boomers discouraged by the high prices so they sit tight.

But Simmons notes it is only temporary, as MHProNews understands. The 32 million homes now in Boomer hands will begin changing hands as they age and move on. Says Simmons, “Their actions will reverberate through the housing market.##

(Photo credit: howstuffworks–Baby Boomer couple)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

MBA Report: Household Formation may Rise to Nearly 16 million by 2024

September 25th, 2015 Comments off

rent versus buy   rent-directAccording to what multifamilyexecutive tells MHProNews, demand for more housing units is expected to reach 13.9 million to 15.9 million by 2024 as more households are formed.Household formation has been depressed in recent years by a long, jobless recovery and by a lull in the growth of the working age population,” said Lynn Fisher, MBA’s (Mortgage Bankers Association) vice president of research and economics. “(However,) improving employment markets will build on major demographic trends—including the maturing of Baby Boomers, Hispanics, and Millennials—to create strong growth in both owner and rental housing markets over the next decade.

The MBA report says household formation is beginning later as younger Americans remain in school longer and get married later, and combined with the other demographics, will create a larger demand for housing.

As projected by the MBA, household growth will include, by race:
5.5 million to 5.7 million more Hispanic households in 2024 than in 2014;
3.4 million to 5 million more non-Hispanic white households;
1.8 million to 1.9 million more Asian households;
2.4 million more black households; and
730,000 to 890,000 more households other than the four major categories listed above.

MBA also says by 2024 there will be 12.3 million to 12.9 million more Baby Boomer households age 60 and over, and Millennial households will grow 4.1 million to 5.1 million.

Additionally, the report says there will be 5.6 million more rental households by 2024, three million of them will be Baby Boomers headed by someone 60 or older; and Millennials, 18 to 44, will add 2.7 million more renter households to the mix. But the smaller Generation X demographic will reduce the number of renter households headed by 45 to 60 year-olds by 100,000.

However, says the report, if homeownership rates should revert to their long-term historical average over the next nine years, reversing the negative effects of the housing bust, the rental market could be reduced by up to 2.5 million units. ##

(Image credit:buyrentdirect)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News. MHProNews.

Aging Population with Insufficient Retirement Funds Leads to Manufactured Home Community

August 7th, 2015 Comments off

senior smiling   masterfile creditAccording to what progress tells MHProNews, there are several macro trends in the U. S. that could drive demand for manufactured home community (MHC) living. The aging population, according to the Census Bureau, consisting of 76 million baby boomers, nearly a quarter of the population, many of whom do not have enough retirement savings to sustain them in a lifestyle to which they have become accustomed.

A recent article in The New York Times stated a typical working family headed by someone 55 to 64 years old has only $104,000 in retirement savings, according to the Federal Reserve’s Survey of Consumer Finances—not nearly enough. The Center for Retirement Research at Boston College estimates half of American households will fall short of sufficient retirement income.

The third macro trend, rising property prices, may prevent boomers from borrowing for a new house, but it does offer the opportunity to unlock the equity they have in their current home and downsize to a home in a manufactured home community. Manufactured homes are considerably less expensive than traditional construction methods, but as MHProNews knows, the quality is equivalent if not better.

As Terence Duffy says,Take away the huge hurdle of upfront land costs, replace it with a site rent and all of a sudden housing becomes much more affordable. ##

(Photo credit: masterfile)

matthew-silver-daily-business-news-mhpronews-comArticle submitted by Matthew J. Silver to Daily Business News-MHProNews.

 

12 Million MH Community deal in Rio Grande Valley

October 9th, 2014 Comments off

parkbridge-capital=logo-posted=daily-business-news-mhpronews-Parkbridge Capital Group, LLC manager Lee Meekcoms, whose name is already well established in the real estate industry, led the closing of a $12,000,000 transaction between a private investor from Florida and Paradise Park in the McAllen-Pharr area of the Rio Grande Valley of Texas. Clearwater FL based Parkbridge specializes in real estate sales and investments focusing on mobile homes, manufactured homes and RV resorts.

The transaction included the acquisition and a loan to enhance cash flow. Meekcoms revealed “This investment for the Paradise Park was a significant opportunity, the group is already planning the future. ABC10  and PR Web   tell MHProNews, Parkbridge is actively seeking more such Manufactured Home (MH) Communities in markets all over the Sunbelt.

Reasons for the excitement around investing in MH Communities revolve around the rising value of such properties, as demand for quality affordable living is growing.

Resorts like Paradise Park which offer a luxurious environment at affordable rates are growing in appeal to retirees seeking for alternative ways of living. The Texas location, with all sorts of features, resembles a private club with clubhouse, pool and spa, billiards tables, gym and more.

Targeting the baby boomers market for MH seems to have a bright future in the Sunbelt. The warming sun and affordable living are a desirable combination for seniors looking to relocate. Closings like this, or the recent $1.32 billion dollar SUN-American Land Lease deal, confirm there are opportunities for investors looking to maximize cash-flow in the MHC segment of the commercial real estate space. ##

(Image Credit: Parkbridge Capital Logo)

(Daily Business News article submitted by Lucine Colignon) 

Report Cites Uptick in Demand for MHCs by Investors and Baby Boomers

September 25th, 2014 Comments off

marcus millichap manuf home  their cfredit       maybe rainbow rock in plant city flaMarcus & Millichap’s Manufactured Housing Research Report says rising home prices, improving job outlook and an expanding baby boomer population are adding to increased occupancy in manufactured home communities (MHCs), a trend the real estate investment services company reports will continue. Concurrently, investors looking for large, top quality communities with city services are running into competition (especially for age-restricted properties) from real estate investment trusts (REITs), insurance companies and equity funds. Smaller MHCs without city services but with upside potential are receiving more attention as owners move into retirement years.

The report states energy boom regions are experiencing an uptick in demand for manufactured homes. Rising demand for MH in all four regions of the country is allowing owners to increase rents, further making MHCs a desirable investment. MHProNews understands an estimated 30 percent of retirees over 65 do not have resources to maintain their current lifestyle and may seek more affordable housing in an MHC. Marcus & Millichap is a large national player in real estate investment services, with one division devoted to manufactured housing. ##

(Photo credit: Marcus & Millichap–manufactured home)