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OwnAmerica CEO Greg Rand discusses the downward trend in home ownership and why he believes it will turn around.
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I doubt this is that the troubling number though that we broke on Barney company actually yesterday.
Home ownership homeownership right now at a fifteen year -- -- fact only 65% of Americans now own a home.
So America -- America CEO.
Greg Rand is here to talk about this Greg and I talked about -- lot different ways and I think I'm calling America the dropout society we dropped out of the jobs market not really we drop out of college who dropped out of the institution of marriage we're not having kids anymore we've given up on the American dream including penthouse at the white picket fence.
We used it.
Much of -- given up I mean this is fairly predictable if you think about people losing homes to foreclosure getting out of homes cause -- short sales.
Not buying homes -- -- staying home longer with the parents now buying homes -- mortgage standards got tighter.
The the trending downward of homeownership is explainable.
And it's fairly temporary in my opinion I don't see it changing demographics is that people don't wanna all -- -- second -- -- community of like how many states isn't so much cheaper to all of our house then to -- -- why how could just explain why are people -- when they can actually have ownership.
Ownership of -- house the American dream or maybe.
Former American dream it's a good point but here's the the flip side of this thing is -- think of the residential real estate market is the housing business -- the housing market not just the homeownership market.
When you've got.
A surge in investor sales what you're seeing right now is because of the growth of four -- five million new rental households during this recession.
Investors are voting with.
With their dollars and showing confidence in the recovery the housing market eventually because investor sales were up 65% last year.
We strip out investors -- -- what does that tell you that but that -- -- -- homebuyers sales are down I think.
My experience in the housing market has been when when the economy is shaky people freeze they just stay put.
You know and then where things Begin to -- out you see the search come back again I don't.
I don't believe we're gonna see homeownership rates back where they were for a long time because a lot of that was artificial yet people getting mortgages.
Without having to credit without having a down payment so we may be finding a new normal terms of -- more homeownership rates but.
Don't extrapolate that to mean that demand to -- real state in America.
Has gone away because a new crowd his command.
To fill the void that credit and that's not includes guys like mark when there -- guys -- a lot of money who can afford to make these sort of investment to sit on for awhile right market me.
-- there -- truth to the fact that the average American can no longer go out there by a whole I mean that's what I'm hearing you say.
-- -- -- And -- means and what that not mean I'm hearing you say that the people behind the homes right now are -- -- rich people who can afford to finance and investment.
As opposed to that kid who's five years out of college got a wife and is looking to have kids -- What they have sit down payment to have to have a job they have to have a credit score and the total student loans that are however you have to have a job which is not available -- got well.
I think I think mark and this is really to meet with essential issues is not about affordability it's about the desire.
In other words are we gonna only willing to be country -- apartment dwellers.
In a good question and you know what -- that the sense that I'm getting is that.
I know this marketplace and I know that it it moves in ten to fifteen year increments that they would try to look at month to month year to year the idea that the way people feel right now.
Is the way to get a -- a year from now.
I did a great quote from -- one of the CEOs in the industry who said that's somebody in their twenties what they want out of life they want an apartment they can walk to the bars to.
And crawl home.
That's the same person ten years later when they have a wife and kids a whole different ball game and so if people take you longer to grow up or longer to mature -- would decide they -- actually.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- It may GoDaddy -- I think a large part of this has to do with geography I think there -- a lot of recent trends have shown that you know to avoid a lot of high transportation costs things like that.
A lot of people are concentrating more into the cities and things it.
Are are we necessarily gonna see people local fulfill those current homes that had been built as a result of the housing them.
That's a great question there's some markets around the country that concern me because there troubles have to do with overbuilding during the bull.
Right there are some places for example of Florida subsidies in Florida got nailed by the recession.
Just because of the market turning down and -- people coming -- -- houses getting negative equity.
But that he gets its parts of South Florida like Miami where they've built 60000 content on the waterfront at one time.
Those units still exist and -- that flood of units drives prices down an oversupply.
Now they become an oversupply of rentals.
It's gonna drive rental rates down so -- I get a little squeamish about the cities that.
Built too much because they have to burn that inventory off on sports and it's a solution for Miami's is build more bars Greg -- appreciated.
I'm not.
