With Our Classic Vision of a Home Now Simply Unaffordable, Where Can We Go From Here?
I thought we were pushing the brink of the price escalation in 2019. But the pandemic added new pressures, forcing prices even higher.
Material and labor scarcity as well as building restrictions and slow response times from the city, reduced new construction supply. With job and housing uncertainty, people were reticent to sell, reducing the existing housing supply. Add the fuel of sub-inflation mortgage rates to the housing shortage "fire", and we now have competition pushing prices so high, they are simply unaffordable for the vast majority of would-be buyers.
Factors will change, over time, and, indeed, we are already seeing supply increases. Prices will inevitably fall. But with mortgage rates rising, affordability is likely to lag behind the price curve.
The most frustrating part of this process, for me, has been watching older friends and acquaintances deal with the changing market. Many thought it best to take advantage of the Seller's Market and downsize, not realising they would be unable to get a smaller house for less than their current mortgage. Once the home sold, they were stuck with some pretty bleak options.
As I have researched community housing, land-lease, tiny and pod homes and other solutions which make an attempt at either lower entry costs or providing more-for-less, I ran across a new community idea being offered in Texas.
The company is Nue Community, and it's stated vision is to provide customized homes combining "Community, Nature and Technology" at an affordable price. They are trying to do this by creating low-production cost / high-quality modular units, and eliminating investor pricing interference. That means they can bypass the time and cost delays of stick-built dwellings on site and keep competition down with 100% owner-occupancy.
Neu Community is starting with three projects in the greater Austin area and says they plan to expand with demand to other states.
Whether this becomes a reality at the planned sites and whether it will be welcomed in other states will be interesting to watch. Either way, it's great to see people thinking outside the box, and working on new visions and solutions.
It's also fun to play with designing different configurations and seeing the beautiful renderings on their website. (At least it is for CAD and home designer nuts like me.)
Is this an option you'd like to see in Colorado? Let me know. I work with lots of creative people who want to see better options for low environmental-impact housing that is exciting, safe and affordable.