The report this week about the increase in multigenerational households having a negative impact on housing was fascinating, but irrelevant to our local demand for homes. Likewise, the talk about student debt, and the difficulty of finding jobs doesn’t impact the NSDCC market either, because very few freshly-minted college graduates are buying $800,000 homes. Thankfully they can move in with their parents!
Theoretically, these obstacles might affect buyers in the starter-home areas, but the demand there is so red hot now that we don’t need more buyers – we have plenty who are trying to buy, but are struggling to compete. For example, Skylar is finally in escrow, after offering on 15 properties since June – that’s a lot of losing!
Mortgage rates are the only thing that matters, and as long as they stay in the 3s and 4s, it looks like the demand will stay strong. Take for instance, the preliminary October detached-home-sales count for NSDCC, already up 36% year-over-year, and the month isn’t over – there will be another 5-10% added to this number:
|NSDCC October||# of Sales||Avg. $/sf|
Overall, we’ve had 19% more NSDCC detached-home sales in 2012, compared to last year:
|NSDCC Jan-Oct||# of Sales||Avg. $/sf|
Considering how strong it has been all year, this is a market for the affluent – those with big down payments, and/or those willing and able to carry big monthly payments.
If anything, the multigenerational groups are probably pooling resources so they can buy together in areas like ours – so the increase in multigenerational households would be adding to the demand.
It’s good that college kids can go home again!