Why Today's Homeownership Numbers Could Change Your Life

By
Real Estate Mortgage Broker

Homeownership rate hits a 10yr low.....Today The Census Bureau released its survey of residential vacancies and homeownership for the fourth quarter of 2010. Every quarter the census bureau releases it's backward looking report to give us some information on homeownership in the country and how it compares to a year over year number. The report covers data by region, age, race, and income levels.

 The report covered the following:

The total of all housing units for the 4th Quarter of 2010 was 130.85 million, up slightly from the same time period of 2009

The number of owner occupied units: This total number came in at 74.8 million

The number renter occupied units: This was 28.8% of the total of the total housing units

The number of vacant homes: This is 18.39 million (we need help on this one)

Homeownership is down which means rent inflation could be on the way up.Reason being; so many more people are renting so you have less and less rental properties and landlords know this and therefore can boost up the rents a bit. This may lead to an increase in sales in multi-family inventory, at least we can hope so. This maybe the only positive in the report. Tighter lending policies means it's harder to qualify for loans so and many have turned to renting as a necessary alternative. I'm afraid that this could start to create a larger problem. If you have looked closely at your supermarket bill lately you will notice that food prices are are on the way up. This is a world wide phenomenon and part of the reason we have had the civil unrest in many countries as of late. Now I'm not saying we are the next Egypt but take a step back and look at things for a minute.

Gas prices are on the way up

Food prices are on the way up

Unemployment is still above 9%

I hope like the rest of us that the strength of the American Spirit will allow us to generate the industry to pull ourselves out of the mess we have created. The very real fear is not these daily economic reports or data points, its the reality that world is changing around us. We as Americans think we are safe in our little bubble, but what happens when counties like Spain have 20% unemployment, wheat prices are up 28% over last year, and corn prices are up 37% over last year. Not to mention oil prices are now over 90$ a barrel.

This in large part can all be traced back to our country and our housing crisis. We exploded with housing growth and banks created investment vehicles with credit default swaps and other exotic investment vehicles that were bundled and sold around the world as an unknowing house of cards. It worked like this, Joe borrowers $50 from me and I'm worried he might go broke and not pay me so I go to Julie and ask her to insure that debt and she does for $5. Well that $50 debt was the housing market and when the values went down that debt had no collateral and Julie or AIG could not insure the debt.

We then come in and pump the banks full of hundreds of billions to save our tails. The problem is that this has led to inflation around the world, not the same inflation that we are used to seeing but a scarier inflation in the shadows. Our quantitative response to the housing crisis can be argued to the point that it's causing these food inflation's. We know the credit crisis caused "The Great Recession", high unemployment, and full circle to the start of this article higher rental numbers.

 On the surface the Homeownership Report can be read as a simple census quarterly report. Analysts and housing experts will have their say to the relevance of the numbers to the housing market. They will say it's good or it's bad. But if we step back and look at in terms of a global report. A report that has families struggling to find the landlord willing to rent to them after their credit was destroyed by the side of effects of a banking crisis. A report that shows rental inflation, as a side effect of Wall Street's greed. As a report that could work against all of us with higher food prices, it leads me to my hope that we look for answers. The answers to all these problems is not more money for this program or that program. The answer has to be in the way we think as human beings. We need to change the we think as human beings. This was a HOME CRISIS, not a HOUSING CRISIS.

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John B. Saari


 

Direct Cell: 508-740-7442

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  1. Donald Bradbury 02/01/2011 08:05 PM
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Rainer
87,403
Thomas Cruse
Product Manager at DataQuick
DataQuick

11% of all USA residential properties are vacant - an unprecedented level. And, bank "shadow inventory" is estimated to not be cleared for another 4 years. Someone has to live in all these homes...

...or will we just start bulldozing?...

February 03, 2011 05:42 PM
Rainmaker
1,161,084
Gene Riemenschneider
Turning Houses into Homes
Home Point Real Estate

This is a great post and confirms what I have been telling my investor clients.

February 03, 2011 08:11 PM
Anonymous #30
Anonymous
Anonymous

Greed of a few affects many.  It is sad that so many people have to suffer when they had no control over the BIG BOYS actions.  Kind of like putting the wolf to guard the henhouse.  Great post!

February 03, 2011 09:00 PM
Rainmaker
353,682
Kathleen Cooper
EXIT Realty Partners - Broker, REALTOR®
Kathleen Cooper, Best Option-EXIT Realty Partners, REALTOR®

Great post John!  Tried to share via re-blog, but the site is not allowing that.  Will definitely come back when they've fixed that and share with my readers.  Keep up the great work! 

Sincerely,

 

Kathleen

February 04, 2011 09:39 AM
Rainer
50,384
Ann Bellamy
Hard money lending for investors in NH and MA

Well, all real estate is cyclical, including rents.  Actually, civilization is cyclical, they rise and fall also.  I'm ok with optimizing higher rents, because I sure have to suffer through the vacancies when the rental market tanks.

Thanks for the post.

Ann

February 05, 2011 10:29 AM
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Rainer
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John Saari

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I decided to start writing this blog to be an education resource to my referral partners and my clients. We live in a new world of mortgage lending in which we need to be up to date on the changing underwriting guidlines and mortgage products offered. It's through these updates that we will all be able to provide our clients with the customer service they derserve and expect. It's my belief that this industry insight is what will take our business to the next level. Education = Confidence