It’s taken a while to come to the conclusion that America simply doesn’t have enough housing. Too few new homes and too few resales are two reasons home prices have outpaced incomes and that’s likely part of the cause of increased inflation.
The most recent update by the U.S. Census Bureau says the approximate population of the United States is 342.6 million people. Ten years ago, the population was 322.9 million. Our annual growth is roughly 0.5% per year.
Likewise, Florida currently has an estimated population of 23.5 million people. Ten years ago, the population was 20.6 million. California and Texas both have larger populations than Florida, and New York is below us at 20 million – just about where Florida was 10 years ago.
So, is there a solution to the shortage of housing, which is now estimated to be somewhere between 1 million and 5 million units?
States around the country are rethinking zoning regulations and regulatory red tape to free up restrictions on new construction. Some of the ideas are accessory dwellings in backyards to use for family members or legal rentals. Some states are overriding zoning laws on the height of rental buildings and allowing builders to reduce costs and encourage building by changing zoning to free up interior space for more units.
One of the biggest complaints by builders is the cost of construction loans. Interest rates have increased for residential financing, as well as construction financing. Getting the federal government involved in lowering the cost of construction loans through cooperation with Fannie Mae and Freddie Mac could be a good first step.
Developers are looking at ways to reduce the cost of construction and modular construction is a possibility. Prefab and modular construction done off-site and assembled on-site could substantially reduce building costs.
Builders should also rethink building starter homes, rather than focusing on larger homes designed for higher-income buyers. Finally, more focus and local legislation needs to be placed on public housing. “Social housing,” as these units are now called, is not a new idea. Most major cities have communities geared for low- and middle-class residents, but more are needed to close the national housing gap.
It’s pretty simple: The more housing units that become available, the faster resales of existing homes will come down in price, making them more affordable.
Now it’s time to see what’s going on in our neck of the woods. The July Manatee County sales statistics provided by the Realtor Association of Sarasota and Manatee came out last week:
Single-family homes closed 11.2% more properties this July than last July. The median sale price was $495,000, up 1%, and the average sale price was $675,943, up 7.1%.
The median time to contract was 50 days this year compared to 58 days last year. Pending inventory was up 7.3%, and the months’ supply of available properties was 4.1 months, compared to 4.8 months last year.
Condos closed 18.4% more properties this year compared to last year. The median sale price was $313,950, down 1.9%, and the average sale price was $342,030, up 3.7%. The median time to contract was 70 days for both years. Pending inventory was up 22.9% this year, and the months’ supply of available properties was 5.4 months this year compared to 7 months last year.
Manatee County’s July sales numbers are, in a word, “strong.”
This is a big, wealthy country, and it’s time to be thinking big when it comes to housing our increasing population.
