While the lack of listings continues to plague some housing markets, affordability is the biggest issue for renters, first-time buyers and move-up buyers, said Glenn Kelman, CEO of Redfin brokerage firm in a recent presentation to reporters and editors at the National Association of Real Estate Editors (NAREE) conference in Austin. The widening gap between rising home prices and lagging wages affects consumers across the entire country.
The search for affordable housing is driving a new migration pattern Kelman dubs the “Wrath of Grapes,” referencing the reverse migration of characters in John Steinbeck’s novel “The Grapes of Wrath.” Instead of moving from the dust bowl states to California, today’s financial woes push people from high-cost coastal cities to the middle of the country and the South.
No easy solution is apparent to increase housing affordability, which has both supply and demand elements affecting the issue.
“There’s no consensus on how to solve the affordability issue or what government action, if any, people want,” Kelman said.
A recent Redfin survey found that 64 percent of the 2,650 respondents want a government subsidy to help working class families buy their first home.
“People are less comfortable with some form of regulation that could limit buyer speculation,” Kelman said.
Data shows that investors who have easy access to capital are buying properties that appeal to working class families who can’t compete and have less access to credit, he said.
“There’s almost no will to liberate market forces on the supply side, so investors are running wild on the buy side, and on the sell side builders aren’t being allowed to keep up with them,” Kelman said.
For example, Redfin’s survey found only 28 percent of respondents support policies to encourage density and 52 percent support policies that limit density.