This week Cherie and I had the honor of speaking with my friend Nicolas Retsinas, the Director of Harvard University's Joint Center for Housing Studies. You may know him as the former Executive Director of the Rhode Island Housing and Mortgage Finance Corporation from 1987 to 1993. Nicolas P. Retsinas was appointed Director of Harvard University's Joint Center for Housing Studies in 1998. The Joint Center is a collaborative venture of the Graduate School of Design and the Kennedy School of Government. The Center conducts research that addresses critical housing and community development issues in America. Nick discussed the Center's 2007 State of The Nations Housing Report. Here are the highlights: 1: After setting records for home sales in 2005, in 2006, total home sales fell 10 percent, starts tumbled 13 percent, and appreciation slowed. Inventories of unsold vacant homes set records and homes in foreclosure were making the news. 2: With the sudden departure of investors and homebuyers priced out of the market, housing activity slowed dramatically in 2006. The recovery in the for-sale market faces the triple threat of tighter lending standards in the wake of high subprime default rates, a still significant number of vacant homes for sale, and buyers waiting on the sidelines to see if prices drift lower. Rental markets and remodeling activity were still expanding last year. 3: The demographics of long-run housing demand remain solid. Net household growth should climb from 1.26 million annual pace in 1995-2005 to 1.46 million in 2005-2015. Continued immigration, together with the large number of second-generation Americans and children of the baby boomers coming of age in the next decade, will reinforce demand for rental units and starter homes. For their part, the baby boomers will be especially active in the luxury and second-home markets. 4: As housing markets peaked in 2005 and cooled over 2006, the impact on home buying and homeownership was immediate. With concerns over the impending correction curtailing demand and affordability pressures mounting, both the national homeownership rate and the net growth in the number of homeowners fell for the second consecutive year. 5: With the economy generating jobs and homeownership faltering, rental markets continued their gradual recovery last year. In fact, the 1.2 million growth in renter households in 2004-2006 more than made up for losses in 2002-2004. This renewed demand helped to reduce vacancy rates and firm up rents across much of the country. 6: Affordability problems remain the nation's fastest-growing and most pervasive challenge. Although middle-income households increasingly feel the pinch, it is the nation's low-wage service workers, part-time workers, the disabled, and retirees that bear the heaviest burdens. Moreover, 2.1 million households live in severely inadequate housing while about three-quarters of a million people are homeless on any given night.This Week's Real Estate Insight: Harvard's Joint Center from Housing Directors Nick Retsinas agrees that in the Northeast at least, it would appear that the worst of the slowdown is behind us. Now is a great time to buy a home if you are in it for the long haul, as long as it is the right house for you at the right price.
