The Tiny Homes Villages Trend

March 27, 2023

Rise and shine! It's a new day and The Shaker is here to serve you the best mix of residential real estate news. Yummy yummy.

THE BIG SPLASH

The Tiny Homes Villages Trend

Escape, a Wisconsin-based company, has expanded its tiny home village in Thonotosassa, Tampa Bay, offering residents a piece of heaven at a reasonable cost. The development, comprising of 23 pint-sized properties ranging from 240 to 500 square feet, sold out almost immediately after the announcement.

  • The homes start at $100,000 and go up to $240,000, and an additional $625 a month to rent a lot in the village. 

  • The new development provides an environmentally friendly and economical solution to the affordable housing crisis, according to Dan Dobrowolski, Escape’s founder and CEO. 

  • The tiny homes are mobile, but Dobrowolski said the village functions more like a traditional neighborhood than an RV park. Each of the homes has its own deck and front yard, with a large park at the center and a community pool. 

  • All of the new homes have been built and are currently being installed, with three already sold and five going under contract. 

  • Residents of the tiny homes come from various backgrounds, including an 80-year-old retiree, a recent graduate, an Amazon warehouse employee, and a local doctor.

A SCOOP OF MARKET DATA

Experts predict more buyers will return to US housing market

The US housing market is seeing a rise in purchase demand and stabilizing home prices as mortgage rates continue to fall.

  • Experts are predicting that more buyers will return to the market as rates become more affordable, particularly as the average 30-year fixed-rate mortgage fell to 6.42% this week, compared to 6.60% the previous week, and 4.42% a year ago. 

  • This drop in rates means more Americans can purchase a median-price home by putting 18% down without being cost-burdened. 

  • Despite the softened stance of the Federal Reserve on additional rate hikes, the federal funds rate remains high, meaning that a higher interest rate environment is still here to stay for the time being, including for home loans. 

  • While economists dream of a rebound in the US real estate market this spring, they caution that the fall in mortgage rates does not mean housing prices will subside anytime soon.

A SCOOP OF RENTALS

Meet the Most Competitive Rental Market in the Country

North Jersey has been ranked as the most competitive rental market in the country, according to a report by RentCafe.com.

  • The report found that an average of 12 people were competing for an apartment in North Jersey in 2022 due to a housing shortage and only a 0.3% increase in apartment inventory, coupled with 72% of renters choosing to renew their lease.

  • Central Jersey was ranked the 12th most competitive market in the country, with eight people competing for each apartment. 

  • RentCafe.com's research team analyzed Yardi Systems apartment data from 134 rental markets in the US. Home prices in New Jersey increased about 8% in 2022, according to data from the Otteau Group, and this combined with interest rates doubling has meant people are looking to rent instead of buying. 

  • High-income renters also contributed to the competitiveness of the rental market. North Jersey has been attracting more high-income renters who want nicer apartments, more space, and a better work-life balance while still being close to New York City.

A SCOOP OF WARNING

Elon Musk Warns of Real Estate Turmoil

Elon Musk has issued a warning about the state of real estate, including mortgages and commercial property, stating that banks could experience a surge in defaults and lower asset prices.

  • Musk was responding to a report from The Kobeissi Letter that outlined how $2.5tn in commercial real estate debt is set to mature over the next five years, which could result in many borrowers defaulting on loans due to higher interest rates and a decline in asset prices as recession fears grow. 

  • Musk is concerned that the crisis in the banking sector could spread to the housing and commercial property markets, putting smaller banks at risk of major losses if those defaults occur. 

  • He believes that mortgage portfolios could be at risk if housing prices drop significantly, especially in cities where high office vacancy rates are already a concern.

  • Musk is worried that higher rates, tighter lending standards, and remote working trends might lead to a decline in demand for certain properties, causing a wave of defaults and dealing a heavy blow to the institutions that hold those loans.

How was today's shake?

Send us your feedback, ideas, love at [email protected]