December 2016 - Getting Serious About Diversity

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50 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T ANALYTICS THE LATEST The Trouble With Rural Housing Is... Rural housing is aging, and so are its inhabitants. O ver the next 15 years, urban and rural com- munities in the United States will both see their populations grow. The dif- ference is that in rural areas, the increase will be mostly elderly citizens. That's according to a new study from the Urban Institute, which also made the point that it's not just people who are aging in rural America, it's the houses themselves. The institute said that rural housing stock is already much older than that found in cities and as a result is not especially friendly to popula - tions that will be aging in place. "The bottom line," the report stated, is that "we are not ready to house people safely and ad - equately in our rapidly aging rural communities." According to the report, rural America is barely growing but rapidly aging. Between 2010 and 2020, rural populations will grow by just 2 percent, while urban populations will increase by 9 percent, the institute reported. However, between 2020 and 2030; rural population growth will slow to just 1 percent, while urban populations will grow by 8 percent. And it just gets more exaggerated from there. Moreover, demand will not necessarily decrease just because of slow growth. The average per - son today lives longer and is more independent than in past genera- tions, but "a house deteriorates with time, so new housing must be built or existing housing reha- bilitated," the report stated. While new construction is good for jobs and built-in benefits and features, older homes are often built strong and spacious and can be retrofitted for aging-in-place popula - tions. And rural communities tend to have more older structures than cities, which regularly see old buildings razed in favor of new construction. This, the institute said, makes getting into those older rural houses an urgent issue. The institute outlined four ways to help meet the needs of the growing rural elderly population: increasing labor force training to properly rehabilitate the old housing stock in rural America to today's standards; ensure that capital is available for rehabilitation and not just new construction through new sources of financing and government subsidies; encouraging seniors to move to smaller, newer homes and take advantage of govern - ment programs and private-sector actions to do so; and expanding home equity programs. "The entire country needs to prepare to adequately and afford - ably house the large number of aging baby boomers, but the loss of younger households in rural areas means rural areas will feel the effects first," the report said. "Caring for our seniors requires us to renew planning and invest - ment in rural areas." 'As-Is' Homes are Gaining a Higher Market Share Zillow finds an increase in homes that "need work," especially in hot and high-end markets. T hanks to rising home prices and increasing competition, inventories around the country are tight. As a result, the competitive advantage has turned toward the humble fixer-upper. Zillow reported that the cur - rent competitive environment in housing may be giving sellers more flexibility to list their homes for sale "as-is" without needing to fix them up first. According to the firm, there are 12 percent more homes on the market now than five years ago that have listings with phrases like "fixer-upper," "TLC," and "needs work." That percentage is even higher in hot markets and among more expensive homes. Nationally, fixer-uppers priced within the top third of their markets saw the biggest surge in inventory over the last five years, rising nearly 35 percent, Zillow reported. Conversely, affordably priced fixer-uppers, or those valued within the bottom tier, increased less than 3 percent. In some hot markets like Seattle, standard for-sale inventory has decreased 10 percent over the past five years, even as fixer-upper listings increased 33 percent over the same time period. The age of the typical home sold has also nearly doubled. In 2006, homes were typically 15 years old when sold. By the end of 2015 the me - dian age was 28. Somewhat of an anomaly was Baltimore. Baltimore is not usually considered a hot market and has a lot of lower-priced inventory, yet the city topped Zillow's list of markets where the percent - age of fixer-uppers has increased since 2011—110 percent. Portland was a close second, with a 106 percent increase. At the other end, Sacramento saw a 46 percent decrease in fixer-upper listings. "Across the country, homes are selling fast and for high prices," said Svenja Gudell, Zillow's Chief Economist. "Sellers are in the driver's seat, with the freedom to list their home for sale 'as-is' with - out worrying about price cuts or the home sitting on the market. And without sufficient new con- struction the housing stock has aged, so home buyers are finding more and more homes on the market in need of a little TLC."

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