by Joanne Stevens
It’s an up and down housing market and will become more so. Let's take a quick look to see what's up and what's down, and what it may mean for manufactured housing.
First, what’s up?
The fastest growing populations in the U.S. are foreign-born households and people of color, according to the Joint Center for Housing Studies at Harvard University. Minority households will constitute two-thirds of the net new households over the next 20 years. These households are more enthusiastic about home ownership.
Second, what is down?
In the 1990s and until the mid-2000s we were “obsessed” with creating new homeowners, as per the Joint Center for Housing at Harvard. Now, many current and former homeowners (and potential homeowners) aren’t as excited about home ownership. Now more consumers realize that home prices don’t always go up. More consumers understand that you can’t necessarily move to take advantage of something like a new job, if a house has to be sold first. It’s a different mindset.
Warren Buffett in his 2011 shareholder letter wrote “Housing will come back—
you can be sure of that. The devastating supply/demand housing equation is
now reversed. Every day we are creating more households than housing units.
People may postpone hitching up during uncertain times, but eventually
hormones take over. And while doubling up may be the initial reaction of some
during a recession, living with in-laws can quickly lose its allure.”
He goes on to cite a lot of unemployment being due to the loss of housing sector
jobs and housing related jobs as being “hugely important” to job growth.
Fortunately, Mr. Buffett says, demographics is on the side of housing as is the
market system. He ends the housing section of the letter by stating that what
was true in 1776 is true today.
That is, “America’s best days lie ahead.” It will be a diverse housing market.