A few weeks ago, I wrote about the importance of consulting an expert, whether it’s a Realtor, physician or mechanic. This past week, I was privileged to do just that while attending our Economic Outlook Luncheon with speaker Jessica Lautz, NAR’s vice president of demographics and behavioral insight.
The annual Economic Outlook Luncheon is an insightful event the Greater Chattanooga Realtors hosts with the Homebuilders Association of Greater Chattanooga. These meetings offer the opportunity to hear and engage with speakers from the National Association of Home Builders and from the National Association of Realtors.
This year, 200 Realtors and homebuilders met to discuss today’s evolving real estate market. As Lautz put it, “We’re in a new housing market paradigm, but we continue to see multiple offers for properties due to limited housing inventory. Affordability is the concern, where local home prices have risen 17.5% year over year.”
Lautz summarized the housing situation by showing that tight lending, low inventory and changing demographics are affecting the market in ways we haven’t seen before.
Different from 2008, subprime lending is not happening, which shows that our country is not experiencing a housing bubble, but the low housing inventory is a result of under-building by anywhere between 4.5 and 6.5 million homes.
As a result, more families consisting of multiple generations are living in the same home, which is increasing the average amount of time an individual stays in a home.
Lautz also showed a study from NAR that surveyed individuals on the amount needed for a down payment. Typically, a down payment is around 10% of the price of a home, but a large chunk of respondents (35%) say they still believe 16%-20% is required to finance a property.
As Realtors, it’s crucial we tell buyers this large amount isn’t normally required for a down payment.
Lautz also shared some generational findings that brought a particular group into focus. She joked that millennials are everyone’s favorite topic and said their housing situation provides an interesting snapshot of what the real estate looks like for younger Americans.
Millennials, whom Lautz defines as being between 22 and 40 years old, are the “largest adult generation today and the largest generation of homebuyers at 37%. Millennials and first-time buyers face multiple challenges such as rampant competition in the housing market, low housing inventory and buyers who are able to pay cash for properties.”
Lautz also noted that the median age for first time homebuyers is 33 and the percentage of young adults (25-34) who are living at home is over 17%. This represents a large group of people who might look to enter the housing market down the road.
We should never stop learning, which is why I love these events. The collective knowledge of our local homebuilders and Realtors helps us all serve our community better.
So, whether you’re looking to build or purchase a property, it’s crucial to look to the experts. Realtors help our community and serve our clients in many different ways every day. That’s Who We R.
Founded in 1912, Greater Chattanooga Realtors is a regional organization with more than 2,500 members servicing Hamilton and Sequatchie counties in southeast Tennessee and Catoosa, Dade and Walker counties in northwest Georgia. The association is one of approximately 1,100 local associations and boards of Realtors nationwide that comprise the National Association of Realtors. Greater Chattanooga Realtors owns and operates a multiple listing service that’s one of approximately 600 MLSs in the country and services more than 2,700 users.