It is no surprise, at least to those paying attention, that the one area that doesn’t seem to have (if ever) a housing crises is the Washington D.C. area. The growth of government requires bodies, bodies require housing and there you have it. Inventories are shrinking and prices are rising. In an article in Builder by Jim Caulfield titled Nation’s Capital Continues to Lead Housing’s Recovery he goes into some detail about the numbers and the comparisons to the past. I’m reminded of the old line from Casablanca, “I’m shocked, shocked, there’s gambling going on here!” You think? The massive growth in government, at all levels, is driving this non-surprising phenomenon. It’s too bad that those agencies couldn't shift to Florida or Las Vegas or the Central Valley of California. It’s summed up with this:
Perhaps the best news for this market is its current inventory of available for-sale homes. There were 10,510 active listings in May, the lowest number for that month since 2005. “As interest rates remain low and demand rises, the low supply will continue to put upward pressure on prices,” the report states. “This price growth could entice hesitant sellers to enter the market.” However, the report also cautions that the listings might also indicate that many people, worried about the economy’s future, are still comfortable remaining in their existing homes.
You wonder if the legs were kicked out from under this anomaly whether it could stand. But that is an argument for another day and topic. Smile if you are a Washington builder.
In the never ending discussion to make the bottom call, the Wall Street Journal posted an interesting note from a few experts and participants in the current housing market. S. Mitra Kalita posted the article (GO HERE). While most begged the question to some degree, they were all optimistic, the end will come soon – say 2015. That means this bear market will have lumbered across the housing wasteland for eight – yes eight - years, 2008-2015 (inclusive). This is longer than the 1930+ Depression period. Sure housing didn’t really turnaround until the 1947 plus era, but then again there was a war to deal with and the pent-up demand of almost eighteen years.
A friend of mine, Gregg Logan with Robert Charles Lesser & Co. (RCLCO), sent this company missive out a few weeks ago, posing the questions as to whether the housing market still wants the suburbs (GO HERE). It has very good graphics and interesting charts, take a look. The trend is to the suburbs as it has been for fifty years, but as said in the current young parlance of “Friends with Benefits” – it’s now “Suburbs with Benefits.”
And taking advantage of this “suburbs first” concept is Waypoint Homes located in Oakland. Waypoint buys foreclosed homes, fixes them up, and then rents them. It makes many adaptable agreements with its tenants, but what it really does is protect these neighborhoods from blight due to abandonment and lack of care by the banks. They rent over 1,500 homes and hope to grow this by ten times in the next few years. It has been in the local news this past week with its $20 million partnership with Enterprise Community Partners to help expand its reach into marginal hosing markets. Doug Sovern is his article on KCBS quotes Colin Wiel, Waypoint’s founder:
“Basically what we do is single-family rental. So we’re buying homes, renovating them and renting them out, which is our core business model, but to do it in certain harder hit neighborhoods in Oakland than where we’re currently operating today.”
This is an exciting company that saw an opportunity and built an aggressive business model that provides housing, protects these valuable assets in the market, and also gives hope and home to people who often desperately need it. This is not a “Government” program, it is an honest to God for-profit venture, and they are showing everyone how it can be done. I wish them continued success.
Stay Tuned . . . . .