RIVERSIDE, Calif., Oct. 16, 2013 – Some real estate experts are questioning the strength and sustainability of the real estate market recovery because relatively few first-time buyers are willing or able to buy homes.
“If you look at today’s data, it is really the higher end of the market that is growing,” said Debra Still, who analyses sales data both as chairman of the Mortgage Bankers Association and CEO of Pulte Mortgage, a nationwide lender headquartered in Englewood, Colo.
“There has been a lot of pent up demand from wealthy home buyers. But when that subsides or equalizes the question is if we will really have a sustainable housing recovery without providing access to the first-time homebuyer.”
Still noted multiple factors limiting the participation rates of first-time home buyers, including tight credit standards, continuing high unemployment rates and uncertainties involving the pace of hiring.
Still is one of several panelists scheduled to participate in The Norris Group’s 6th annual “I Survived Real Estate” charity gala Oct. 18 at the Nixon Presidential Library in Yorba Linda. She offered some of her latest thoughts on the real estate market during a recent interview with real estate analyst Bruce Norris on his weekly radio program at KTIE 590 AM in San Bernardino.
Still said the low participation rate of first-time buyers is also making builders reluctant to build new housing subdivisions. “Unfortunately, our housing recovery has showed in the last 60 days that it is a little more fragile than what we were all hoping for in the first six months of this year,” she said, adding, “Builders are clearly mindful of credit availability on the low end of the market. Builders are looking at the future and they are saying they are not confident yet. ”
Still said long-term housing demand is typically driven in large part by first-time buyers, who usually account for 60 percent of household formations. But many of today’s potential first-time buyers are saddled with more student debt than their parents had and many are having difficulties finding work.
Leslie Appleton-Young, chief economist of the California Association of Realtors and another panelist who will speak at the “I Survived Real Estate” charity gala, expressed similar concerns during a recent interview with Norris on KTIE.
“We have had a big drop in household formations and a lot of young college graduates who can’t get jobs,” Appleton-Young said, adding, “Many millennials are putting off major life decisions like getting married, having children and buying a home.”
As a result, she said, many millennials are living at home rather than on their own. And while first-time buyers have historically accounted for 38 to 48 percent of home buyers, today they account for only 25 to 27 percent, she said.
Investors will have a chance to hear Still and Appleton-Young share their latest thoughts on the real estate market when they join Norris and other real estate experts during The Norris Group’s 6th annual “I Survived Real Estate” charity gala, which is scheduled from 4 to 10:30 p.m. Friday, Oct. 18, at the Nixon Presidential Library in Yorba Linda.
Other topics of discussion will include the latest statistics on default rates, loan modifications and foreclosures as well as future trends in access to money for consumers and investors. Other expert panelists will include:
The panelists will provide important insights into what real estate professionals can expect to see in the coming months and beyond, according to Norris, who has built a following in the real estate community and with news reporters after producing consistently accurate real estate forecasts.
Proceeds from the Oct. 18th “I Survived Real Estate” event will be donated to Make-A-Wish® Orange County and the Inland Empire, and to St. Jude Children’s Research Hospital. The event has raised over $400,000 for charity in the last six years and almost $90,000 this year alone.
The event has sold out but The Norris Group is offering a free live stream of the event. Those interested in watching live can do so via http://bit.ly/isre2013live starting at 6pm PDT. A performance from international, classical guitarist, Zane Forshee, will stream from 6p-7p PDT. Fingerstyle Guitar Magazine describes him as “one of his generation’s finest guitarists.” The panel begins at 7pm PDT.
Pre-event radio interviews of each panelist can be found in The Norris Group’s radio archives at www.thenorrisgroup.com or via itunes. Now in its 7th year, The Norris Group Real Estate Radio Show features interviews with economists, government officials, association presidents and other industry thought leaders weekly at 6 p.m. Saturdays on KTIE 590 AM in the Inland Empire.
“I Survived Real Estate” has more than 25 sponsors, including HousingWire, PropertyRadar, RODA Construction, the Apartment Owners Association, Investors Workshops, Wilson Investment Properties, InvestCLUB for Women, the San Jose Real Estate Investors Club, MVT Productions, White House Catering, and the San Diego Creative Investors Association.
For tickets and other information regarding the Oct. 18th event, visit www.isurvivedrealestate.com. Reporters seeking interviews with Bruce Norris and panel participants before or after the event should contact Aaron Norris at (951) 780-5856.