Wednesday, November 20, 2013

From White Picket to Upcycled Pallet Fences: Millennials and Housing

Critiques and defenses about Millennials abound. However, I think an overlooked aspect of the kerfuffle over Generation Y is the question “Why?” Although it is great to spur thegeneration on to great heights, it is crucial we understand some of the hurdles they are facing, economically and socially in order to anticipate how the market will have to change and adjust to accommodate a new generation’s capabilities and values.
Educational Debt & Credit
No big newsflash here: millennials are facing unprecedented levels of debt, between the various recessions, housing bubbles, and explosion of educational debt. New legislation in the works is attempting to help set up a more stable higher education financing system as well as relieve the staggering debt loads. Although debt forgiveness is the big buzzword these days, most students will still face shouldering a majority of their debt. Fortunately for the economic outlook, the legislation focuses on creating more income-based repayment plans that won’t put millennials on the street. However, the big question that remains is how will this affect their credit?

Public vs. Private Sector

With the specter of the 2008 housing bubble burst looming over everyone’s head, the situation is no longer about whether or not millennials are willing to take on more debt or have the income to cover minimum payments, it is about if lenders are willing to take on the risk. President Obama has rolled out plans that Fannie Mae and Freddie Mac will be gradually diminished, leaving the private sector to provide the backbone of risk management. With first-time buyers being edged out of the market due to new credit requirements, we could see a short-term slowdown in home-buying.


Surprisingly, the instability recently exhibited by the U.S. government shutdown and continued clamor over the debt ceiling may actually work in the market’s advantage. Millennials, wary of being overly reliant on vacillating government promises, might become increasingly inclined to use their savvy to explore home equity loans andcarefully consider newly-revised reverse mortgages as part of their retirement plans. Having front-row seating for the recent economic meltdowns, the newest generation will be more inclined to do their research and not bite off more than they can chew, meaning they might, actually, leave a positive legacy for the housing industry.

American Dream

As the Keeping Current Matters crew mentioned, homeownership is still an important idea to many Americans.  If the government and the private sector work together to slowly adjust the system and increase stability, which is already the direction we are driving in, we can expect to see homeownership continue to increase with this generation.  However, we should expect to hold the memory of Desi and Lucy fondly in our hearts, and leave them there as the face of home buyers will be forever changed.
It is a pervasive misconception that millennials are thoroughly disenchanted with the concept of settling down. The revitalized home-making movement—as evidenced on social media platforms like Pinterest--within more progressive millennial circles would indicate that although it might take a bit longer for the birds to return from their explorations, they will inevitably nest.
Furthermore, the creativity and frugality of Generation Y will provide them fresh incentives to invest in housing as home ownership opens up new avenues hosting friends and international travelers. As this new group of home-buyers realizes that a mortgage doesn’t necessarily clip their wings, we should be able to anticipate a new, stronger, and invigorated market of responsible borrowers. These iPod-wearing, tweeting, bicycle-riding youngsters just might be the market we’ve been looking for.

Tuesday, November 12, 2013

Where Prices are Headed over the Next 5 Years

by The KCM Crew on November 12, 2013 in For Agents

Today, many real estate conversations center on housing prices and where they may be headed. That is why we like the Home Price Expectation Survey. Every quarter, Pulsenomics surveys a nationwide panel of over one hundred economists, real estate experts and investment & market strategists about where prices are headed over the next five years. They then average the projections of all 100+ experts into a single number.

The results of their latest survey
The latest survey was released last week. 

Here are the results:
  • Home values will appreciate by 4.3% in 2014.
  • The average annual appreciation will be 4.2% over the next 5 years
  • The cumulative appreciation will be 28% by 2018.
  • Even the experts making up the most bearish quartile of the survey still are projecting a cumulative appreciation of over 16.8% by 2018.
Individual opinions make headlines. We believe the survey is a fairer depiction of future values. Click here for the article in Keeping Current Matters.

Thursday, November 7, 2013

In the Funk Zone

The first thing you notice in The Lark is an 18-foot-long, 2,000-pound table with seating for 24, fashioned from a 200-year-old fallen tree rescued from an Oregon forest. The communal dining platform is more than just the most coveted table in this popular new Funk Zone spot. As something at once reclaimed, repurposed, handcrafted, great-looking, and a place for people to gather, it embodies the foundational ethos behind the restaurant. “The table was a labor of love, like the restaurant,” says Managing Partner Sherry Villanueva. “Everything here is vintage, repurposed, handmade, original and special – and the communal concept is the core of what we’re about.” The other tables were made from the same fallen tree. The seats in a row of semi-private booths are antique church pews. The bar stools and the dining room chairs were all bought second-hand. A 100-year-old Catholic confessional from Provence “houses” a pair of tables for two. But these are antiques made modern by context, from the long steel bar to the exhibition kitchen to the steel girders that frame the expansive patio. Executive Chef Jason Paluska’s New American menu follows suit, reviving “old” dishes through thoughtful tweaks at the edges and a laser focus on quality, care, creativity, craftsmanship and the best local ingredients. Charcuterie is available, but so are up-to-date deviled eggs stuffed with pancetta, jalapeño, smoked paprika and chives. The new vegetable darling, formerly boring cauliflower, is caramelized and served au gratin with gruyère, preserved lemon, chili flakes and bacon breadcrumbs. A whole grilled branzino cozies up with kale and fennel slaw, barley-caper risotto, grapefruit and salsa verde. And the classic half-roasted chicken with brown butter polenta and spinach is the hit of the house. Speaking of, Executive Sous Chef Nick Flores bats 1.000 in the clean-up spot, his handcrafted, understated desserts perfectly converging past and present.

Monday, November 4, 2013