Housing Market’s Loss Helps Affordable Housing Providers
- Jan 05, 2008
The nation’s high foreclosure rate–Irvine, Calif-based Realty Trac said in November that foreclosures were up nearly 68 percent from the same month in 2006–has led to an interesting phenomenon: Banks who are anxious to unload many of their foreclosed upon items.
Some likely don’t want to invest in the properties’ upkeep; other banks possibly are acting out of fear the housing market will in fact continue downward next year, further reducing the homes’ value.
That’s good news for investors who are eager to buy foreclosed properties and land and reduced homes.
However, those deals might not be as much of a steal as investors had hoped. "Many markets are still overvalued," David Stiff, chief economist at Fiserv, told BusinessWeek. "The [previous housing price] increases were just so meteoric they need a larger correction."
So many are waiting the slump out–holding off on buying a new home because they are certain the next six months will bring unbelievable bargains.
And yet, an unlikely investor–one not looking to make money off the low market–has emerged: Habitat for Humanity, the nonprofit homebuilder.
- Dallas Habitat President Philip Wise has created the Texas Habitat Land & Development Fund to finance, purchase and develop property because the market is low. The fund will work with Habitat’s 15 metro affiliates in Texas and Oklahoma. It’s already secured 500 lots in Texas, which the fund will close on in the next three months.
"We can now acquire raw land, prepared lots and possibly finished homes from builders, investors and lenders cheaper than any time in the previous seven or eight years," Wise told The Dallas Morning News. "We’d like to double Habitat production in the big cities in the next four years."
- Sarasota County in Florida recently gave $10 million to revamp three of the area’s six public housing sites throughout 2014, according to the Sarasota Herald-Tribune. But those requiring public aid aren’t the area’s only problem anymore. Forget that we have a 10-plus month supply of new homes still to sell in this country. Forget that building has slowed because housing demand has decreased. As prices stay stubbornly higher than many can afford and financing becomes harder to get, there is still a strong need for housing–as long as it’s reasonably priced.
As such, Sarasota’s Habitat for Humanity chapter won preliminary approval in December for a 200-home program in Newtown, Fla., which will contain homes for people making just 30 percent below the county median income–a far cry from public aid, but a growing sector that is being pushed out of homeownership by high costs and flat employment growth.
In 2004, during the real estate boom, the county created a trust to help provide middle-income families with affordable housing; that’s now more needed than ever. The county voted in December to continue funding the trust.
Cheaper options for affordable housing creators: It makes sense. And it’s one piece of positive news to come out of the housing decline–which is something we all can benefit from.