Connect with us

Real Estate Big Data

SXSW: Mayors address using data to solve housing challenges

(REAL ESTATE NEWS) At SXSW, three mayors on stage address the challenges of housing and how data can be used to solve the multi-pronged crises.

Published

on

sxsw housing

The critical nature of data

We all know that data collection is at an all-time high. Facebook knows what to sell you based on your browsing history since you’re logged in, your smart thermostat knows when you’re home and when you’re away regularly, your phone knows everywhere you’ve been, and companies are tapping into this data every microsecond.

But what about city governments? How are they tapping into the available data, and further, how are they using it to solve local housing challenges?

Short answer: They’ve just scratched the surface.

SXSW panel on housing challenges

At South By Southwest (SXSW), Denver Mayor, Michael Hancock, Milwaukee Mayor, Tom Barrett, and Cambridge Mayor, Denise Simmons all spoke about current and future initiatives they’re working on to address housing demands.

On stage, Mayor Simmons focused extensively on Cambridge’s inclusionary zoning efforts and Mayor Hancock acknowledged that Denver can’t build their way out of their 35,000 unit deficit (despite many initiatives to do just that). Both Cambridge and Denver are dynamically different than Milwaukee which has battled a long population decline and is finally growing but has a more intense focus on lower income families with strong actions against bad landlords and blight homes.

Mayor Simmons uses available studies to address tensions with developers who fight the city’s increases in requirements for portions of properties to meet affordable housing standards.

But when pressed, all three danced around questions of using the data for more granular specifics than affordable housing units, population growth, and transportation challenges. This again reiterates that city governments have barely scratched the surface and while not addressed during the panel, we would note that data collection and good data analysis can be extremely expensive and when a government is trying to squeeze money from the budget already, it’s still not a reality.

Politics and housing

But people are working on to make it a reality. In the halls of SXSW you’ll hear buzzing about government data hackathons and it’s not about hacking into the government, rather private citizens taking the endless public data and turning it into something useful for citizens and governments. You’ll also hear a considerable anti-Trump sentiment, as is common among people at massive tech conferences.

And as you’d guess, three politicians on stage took the opportunity to sidenote their fears about the federal budget squeeze. Although HUD Secretary Ben Carson vowed to protect lower income neighborhoods during his confirmation hearing, there is a potential $6B HUD budget cut on the horizon.

All three mayors expressed that they already struggle with their current funding and that stripping federal funding, particularly community development block grants (CDBGs), would be devastating to their efforts.

Affordability, front and center

The National Association of Realtors (NAR) has continued to note with urgency that affordability is one of the most pressing issues on the housing industry, and all three mayors are using available data to implement initiatives to help their local citizens.

There is massive opportunity for local and state governments to use available data to do so much more than just push back on developers – data can transform sustainability efforts, how healthy we are as communities, and how we connect.

We asked Mayor Barrett how they were partnering with the Realtor community on affordability and he noted they were working with the Wisconsin Realtors Association but didn’t dive into details.

Again, this is where we see another tremendous opportunity – for brokerages, local boards, and state associations to partner with mayors to offer their data to local governments, to lend their time and talent to tackle affordability challenges.

While housing is so much more than affordability, with populations shifting in and out of urban and suburban areas, it is currently a core theme when talking to anyone in a position to impact the future of housing. Particularly mayors.

Let’s talk again in 10 years

When we have this discussion again 10 years from now, you’ll hear more about data being used to track upward mobility of residents, sustainability as part of housing requirements, new ways of meshing private and public dollars, and much more.

The NAR Center for Realtor Technology (NAR CRT) has been partnering with universities, private companies, and taking other creative measures to study how data can be used. For example, they’ve asserted that some day all smart thermostat data could be collected and become a line item in the MLS so that you can search for a home or eventually a neighborhood based on air quality. And based on discussions with them, even that is just scratching the surface of what’s possible.

City governments will catch up to the CRT model of constantly digging, theorizing, and partnering to research without having to blow the entire city budget on a data firm. So let’s talk again in a decade – I can’t wait!

#SXSWhousing

Lani is the Chief Operating Officer at The Real Daily and sister news outlet, The American Genius, and has been named in the Inman 100 Most Influential Real Estate Leaders several times, co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

Real Estate Big Data

With housing demand so high, why are sales stagnant?

(REAL ESTATE NEWS) The housing market is on fire, yet some serious constraints are holding back sales levels – let’s discuss.

Published

on

housing optimism

If you have a pulse and are on the internet, you already know that the housing market is white hot, with bidding wars in more cities than ever. So why in the world are home sales stagnating?

Pending home sales rose only 0.4 percent in March, according to the National Association of Realtors’ (NAR’s) Pending Home Sales Index (PHSI), decreasing 3.0 percent on an annualized basis – the third consecutive month of annual dips.

Despite a strong economy, NAR points yet again to “unrelenting inventory constraints” which they recently said would only be relieved by builders stepping up production, more homeowners putting their home on the market, and/or investors releasing inventory.

NAR’s Chief Economist, Dr. Lawrence Yun says contract activity is moving sideways and not breaking higher despite the strong job-creating economy.

“Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory,” said Dr. Yun.

He continued, “Steady price growth and the swift pace listings are coming off the market are proof that more supply is needed to fully satisfy demand. What continues to hold back sales is the fact that prospective buyers are increasingly having difficulty finding an affordable home to buy.”

Dr. Yun forecasts that existing home sales will hit 5.61 million this year (up slightly from 5.51 million last year), also forecasting the national median home price will rise 4.4 percent.

He notes that affordability and availability are holding back home sales, combined with price appreciation outpacing incomes, and mortgage rates rising, sales will soon peak.

“Much of the country is enjoying a thriving job market, but buying a home is becoming more expensive,” said Yun. “That is why it is an absolute necessity for there to be a large increase in new and existing homes available for sale in coming months to moderate home price growth. Otherwise, sales will remain stuck in this holding pattern and a growing share of would-be buyers – especially first-time buyers – will be left on the sidelines.”

Continue Reading

Real Estate Big Data

Home sales surge in half of the nation, slump in the other half

(REAL ESTATE NEWS) Home sales rose last month, despite challenging inventory and affordability conditions – but not in all markets.

Published

on

home sales

Talk about mixed signals. We ended last week with alarm bells that affordability is restricting the housing market, yet home sales in March actually surged in the Northeast (up 6.3 percent) and Midwest (up 5.7 percent) compared to just one month prior.

Meanwhile, home sales slipped 0.4 percent in the South, and a whopping 3.1 percent in the West. Sales levels in all four regions are lower than they were at this time last year, reinforcing the supply and demand challenges, putting homeownership out of reach for a growing pool of potential buyers.

NAR Chief Economist, Dr. Lawrence Yun has indicated that the only way to loosen the noose is a combination of more current homeowners opting to sell, builders increasing new home production, and investors releasing inventory.

In the last year, the median existing home price rose 5.8 percent to $250,4000 with March as the 73rd consecutive month of annual gains.

The average number of days on market decreased to 30 days from 37 in February and 34 in March of 2017. Half of all home sold were on the market for less than a month, and in some cities, bidding wars and immediate sales are common.

“Although the strong job market and recent tax cuts are boosting the incomes of many households, speedy price growth is squeezing overall affordability in several markets – especially those out West,” said Dr. Yun.

That said, there is a silver lining.

NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty notes, “First-time buyers continue to make up an underperforming share of the market because there are simply not enough homes for sale in their price range.”

Supply conditions improve in higher up price brackets,” concluded Mendenhall, “which means those trading up should see considerable interest in their home, as well as more listings to choose from during their own search.”

Continue Reading

Real Estate Big Data

Housing prices rise, outpacing wage increases

(REAL ESTATE NEWS) A new joint report from NAR and realtor.com reveal that affordability conditions are eroding and there are very few cures to this problem.

Published

on

housing sales

Good ol’ economics – housing demand continues to outpace supply, and bidding wars are now common in many cities. On a national scale, affordability is increasingly threatening many peoples’ ability to buy, based on their income.

The realtor.com and National Association of Realtors joint report, the Realtors Affordability Distribution Curve and Score, examines affordability conditions compared to income levels for active inventory in local markets. Higher scores suggest a particular market has more affordable homes in proportion to local income levels.

It’s no surprise that in March, the report indicates the least affordable (in proportion to income) is Hawaii, California, Oregon, the District of Columbia, Montana, and Rhode Island. In these states, households at the median income level can only afford 19 to 23 percent of the active housing inventory.

In contrast, the most affordable states are Ohio, Indiana, Kansas, Iowa, and West Virginia, where a a typical household can afford 54 to 62 percent of all active inventory.

The report also indicates that more local markets are seeing worse affordability conditions compared to last year, with L.A., San Diego, San Jose, Ventura, and San Francisco leading the pack. In these markets, the typical household can only afford 3.0 to 11 percent of homes available for sale in their markets.

The typical household can afford nearly 75 percent of homes for sale in Dayton, OH, Toledo, OH, and Scranton, PA.

NAR’s Chief Economist, Dr. Lawrence Yun stated, “The survey confirms that the lack of entry-level supply is putting affordability pressures on too many buyers – especially those at the lower end of the market, where demand is the strongest.”

The report makes even more apparent why first-time buyers “struggle finding affordable properties to buy and are making up less than a third of home sales so far this year,” said Dr. Yun.

Although wages are on the rise, housing prices are outpacing these increases, and Dr. Yun points to the solution being “more homeowners selling, investors releasing their portfolio of single-family homes back onto the market and more single-family housing construction.”

Continue Reading

Emerging Stories

shares

Get The Real Daily
in your inbox

subscribe and get news and EXCLUSIVE content to your email inbox