Home ownership dropping everywhere

[John P]

I found this story that I thought was relevant http://www.theatlanticcities.com/housing/2013/07/steady-decline-homeownership-everyone-everywhere/6373/. Atlantic Cities has good content. I wonder how this is seen in Jacksonville.

[duvaldude08]

I found this story that I thought was relevant http://www.theatlanticcities.com/housing/2013/07/steady-decline-homeownership-everyone-everywhere/6373/. Atlantic Cities has good content. I wonder how this is seen in Jacksonville.

I just read article stating the opposite about Jax.

[Tacachale]

Here it is:

Jacksonville's home sales growth No. 1 in June

http://www.bizjournals.com/jacksonville/news/2013/07/29/jacksonvilles-june-home-sales-growth.html

[mtraininjax]

The days of investors being able to come in and get homes at 20-30 cents on the dollar are going, going gone soon. Then there are the banks who are more willing to do short sales and the court system which is pushing the retired judges downtown to process more foreclosures and get rid of the shadow inventory. All this points to more inventory coming on the market that is favorable to first time and new home buyers. Rates are still low and new homes are still trying to get back on track. NEFAR has shown that we have seen almost 15% month over month growth for the first 6 months this year. Our area is cooking in real estate.

[m74reeves]

so how many of the sales in JAX are homeowners? or are we seeing increased investor purchases?

[Tacachale]

^The Biz Journal says institutional investors make up 16%, down from 17% last year. That's clearly not driving the increase. More likely, we're probably seeing a lot of those foreclosures and short sales finally starting to clear, and banks are somewhat more able to give out loans, meaning that more people who would have been buying homes are now able to.

[Dapperdan]

Here is a question. Does it make sense for a young professional to own anymore? I notice more and more people love being mobile and love being able to pick up and move on a dime. You can do that much easier renting than owning. Has the American Dream been going through a paradigm shift?

[Tacachale]

In my opinion, a group of buyers that did not exist 2 years ago, that had come into town buying up close to 1000 moderately (75-125k) priced homes that out of no where has 16% of all purchases is definitely lifting the market.


The foreclosure docket hasn't slowed yet and there are still a ton of abandoned homes out there in good and bad hoods that haven't even started the process yet.

To me the market definitely "feels" better but I don't trust it.

Did they really not exist two years ago? Do you have some numbers? Just curious.

[Bativac]

Here is a question. Does it make sense for a young professional to own anymore? I notice more and more people love being mobile and love being able to pick up and move on a dime. You can do that much easier renting than owning. Has the American Dream been going through a paradigm shift?

This is just anecdotal, but in the case of my wife and I (we're in our early 30s, no kids) and our peers, home ownership is very low on the list of things we wish to accomplish (and we foolishly bought a home a few years back that we're hoping to get out of in the next year). From what I've seen, mobility and the desire to not just change careers but to experience living in different places are much more important than owning a large box to keep all your stuff in. Obviously that changes when kids come along, but (and again this is just anecdotal) kids seem to be less important to people my age and younger than maybe to prior generations.

Heck between student loans and the inability to find a job paying a decent wage, a lot of my peers have no hope of putting away a down payment and can't get approved for a big enough home loan that will get them into a decent place.

[JFman00]

My peers, both military and civilian, see homeownership in purely financial terms. Very few of my friends will buy a place they fall in love with unless they know, with as much certainty as possible, that it can be rented out profitably or at least cover costs and resell at a profit. Especially for myself and other military friends of the younger generation, we tend to be interested in using our VA loans and favorable debt/income ratios to start assembling our own portfolios of rental properties.

TL;DR Millenials don't romanticize homeownership and will only purchase if it will be a profitable endeavor.

[Debbie Thompson]

Until the bubble collapsed, I had seen property values rise slowly some years, maybe, but not fall, or fall far at least.  It used to be that you could sell a house in a year or two for, if not a big profit, at least at breakeven.  So short term buying was not detrimental.  Now, with the collapse of the housing market, and the loss of equity so many of us have suffered, I think like JF said, short term buyers are scared to purchase.  And with the job market being unstable, that takes a toll. If I were not sure I'd be staying in a place long term, I doubt I'd purchase right now. 

That said, I heard we were #1 in home sales in Jax.  If institutional investors only account for 16%, maybe a bunch of us locals are buying cheap houses.  Lots of my friends and acquaintances are if they have the money.  :-)

[mtraininjax]

It won't be detrimental because the Hedge Funds are paying cash and have long term hold plans, but they will stop buying soon. 

Many hedge funds have stopped buying, because they cannot make the numbers work. Most operate on a cap rate formula where they have rents - expenses / price for property and most want 8-10 percent cap rates. You figure you can loan out money to investors for 10-15% HML, so investing in a house with a tenant - vacancy rates is a bit more of a risk.

Seeing many of these Hedge Funds roll out their portfolios to wall street in new offerings, as in stock as a way for them to sell shares of these new "creatures they have built".

This just in from the National Association of Realtors "Millennials are more confident than any other age group that their recent home purchase was a good financial investment, according to the inaugural 2013 National Association of Realtors Home Buyer and Seller Generational Trends Study. The report evaluated the generational differences of recent home buyers and sellers and found that while 8 of 10 recent buyers considered their home purchase a good financial investment, the number was even higher, 85 percent for younger buyers under the age of 32. The study also found that the largest group of recent buyers was Generation x Americans, those born between 1965 and 1979, who comprised 31 percent of recent purchases, followed closely by Millennials (aka Generation Y) those born between 1980 and 2000 at 28 percent. "

These are national numbers, but Jax is represented in those numbers too. I did some other research on Realtor.com, in the private section, I found that of the 140 million parcels of land, the average age of owners in the USA is 36. Net worth was close to 450,000 and average salary was 53,000 per year. Again, national numbers in USA.