The gap between rich and poor is having a big effect on real estate and America’s housing market. With a shrinking middle class and real estate, home ownership is slipping out of reach for millions of people in this country, according to a survey by Federal Reserve System’s Board of Governors.
Melody Shacter, President of TerraWise Homes, and Chair-elect of the WJCT board, and Mark Sherman, Senior Loan Consultant with loanDepot in Jacksonville Beach, talked about affordable housing on Monday’s First Coast Connect.
When looking at how this is playing out in Jacksonville, Shacter said that her company TerraWise Homes is seeing an increasing number of people looking for new homes in the $175,000 - $250,000 range but said finding homes in that range is getting harder.
She adds that is the low end of the spectrum for new homes. More home builders are starting in the $225,000 range which would be considered an entry level, said Shacter.
Sherman said that in his business he is finding people being prequalified in that $250,000 range and below and that it “oftens takes months to find a property they can secure.”
“It helps to have a conversation upfront way before you start the process to see where you stand,” said Sherman.
Shacter said that many new products are emerging in real estate to be more flexible and builders have to meet people's needs, like having two master suites to rent one out.
Sherman said that single family homes still lead in sales.
Middle housing consist of brownstones, bungalow courts, clustered housing, plexes, rowhouses and stacked townhouses.
Lending agencies, such as FHA, also allow prospective buyers to include other types of income like boarding (renting a room out) when applying for mortgages.
In discussing implicit bias, Shacter said that having a diverse group of people you work with is important. “Diversity, I think is the key to addressing that kind of issue,” she added.
“Every loan application is a specific set of challenges,” said Sherman. I have never had someone come to me and say we are declining this loan because of ethnicity or religion. It is a business by numbers,” he said. “The people in this industry, we work on commission.”
“As people are looking for lower price housing, we have not seen a run on it as in 2002,” said Shacter. Banks are very conservative about lending money. “We have seen a nice steady growth, she added.”