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2. Chapter 9
HOUSING MARKETS
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3. The most important influence on housing demand is population.
The Demand For Housing
Demographics is the study of population & includes:
Total numbers
Age
Sex
Occupation
Income level
Family composition
Other socioeconomic variables
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4. Factors that influence demand
Population
Income
Taste/Lifestyle
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5. Information readily available
Population Research
Information readily available
Forecasts of the next 10 years available by projecting the age composition and adjusting for migration, birth & death rates.
Important considerations:
Each region has its own demographic breakdown.
Migration plays an important role in housing demand.
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6. Income Influences A major influence on housing demand is income.
For demand to be effective there must be ability to purchase.
Income directly influences type, size, density, amenity level, and quality of housing.
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7. Taste Influences
Another major influence on housing demand is taste or lifestyle. Includes:
Better standard of living
Desire/Expectations
Opportunity Cost - other priorities
Investment Consideration
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8. One trend has been a continual increase in house size.
Consumer taste and lifestyles will change over time with generational differences.
One trend has been a continual increase in house size.
However, home price increases in various markets could result in smaller houses because of economic necessity.
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9. The Supply of Residential Housing
Housing differs from many other economic commodities.
A very large percent of the demand is met by the existing stock.
Therefore, change in supply is fixed in the short run.
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10. Future Housing Supply will consists of:
units currently available.
minus those lost as a result of fires, demolition, and conversions to other uses.
increased by buildings converted to housing.
and by new construction.
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11. Housing Suitability
Due to the long life of housing structures, the condition is an important issue.
Long-term maintenance is important.
Without adequate maintenance, blight will set in.
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12. Housing Demand & Features
Housing features are important to the market & include physical features such as space, age, condition, and appointments.
More bedrooms allow families to stay together to share resources and reduce costs.
Granny units are now offered in some single family subdivisions.
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13. Change
Changes in land use demand & development patterns can make certain uses in specific locations obsolete.
Long life of housing means that structures must have flexibility to meet the changing needs of a long-term occupant.
Older homes must meet demands of new occupants with different income levels.
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14. More Change
Filtering process occurs when older houses are acquired because of affordability by lower-income users.
Owners sell their house in high appreciation locations and purchase homes farther away costing less.
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15. Real Estate is one of the most regulated commodities
Government Housing Programs
Zoning
Building codes
Affordable housing
Rent control
Regulating housing markets
Rent controls
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16. HOUSING Governmental programs either restrict or help market behavior.
An overriding concern is the lack of affordability in the housing market.
The problem is especially acute in high-population, high-cost areas.
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