While his role in the development the modernistic architectural style is his crowning achievement, German-American architect and minimalist Ludwig van der Rohe popularized the proverb “Less is more.”
The saying has since been transformed into a platitude used by advertisers and sitcom television. In simple terms, the proverb generally means that having fewer things is better than having too many things.
And such an application certainly has merit. But certainly not now in the current housing market in Georgia as well as the rest of the nation.
MarketNsight is a firm that tracks housing throughout the Southeast. John Hunt, a principal of the concern, recently noted that “scarce inventory of existing homes listed for sale has been the result of a continuing shortfall in residential construction, municipal and county zoning constraints limiting more modest options, and a ‘lock-in’ effect of potential sellers leery of giving up their low interest loans,” according to a recent Atlanta Journal Constitution article.
With two-thirds of current mortgages at rates lower than four percent and 90 percent lower than six percent, according to Realtor.com, there’s no incentive to give up those rates for a higher rate.
And all that makes good sense. However, an owner selling at this point would have ample equity to work with meaning any new mortgage, if the seller applied for one at all, would have a low loan to value ratio keeping any new mortgage payment relatively low. And keep in mind, many existing owners would be downsizing and for them, less is more.
Moreover, at this writing current rates have drifted down to 6.95 percent. While an encouraging trend and one that will continue for a while, there’s no guarantee that it will last, let alone get back into the four percent or even five percent range.
According to Mr. Hunt, “Historically, Americans moved from apartment to small home to larger houses and built wealth along the way,” but “we have stopped the conveyor belt.”
In short, the inventory scarcity and squeeze on prices has shut out not only those wanting to downsize, but the millennials and older Gen-Zers ready to become homeowners.
And it’s not an Atlanta-centric problem.
South Georgia shares in that pain. In the Lowndes County market, for example, in mid-December there were 185 or so active listings for houses $400,000 or under. Only 8 percent of those were $200,000 or less. While the “starter home” price range varies from region to region, that range is typically tagged at $150,000 to $200,000.
And therein lies the problem: little or no starter home inventory.
Utah Gov. Spencer Cox, noting the dearth of starter homes in Utah, recently unveiled his “Utah First Homes Programs” with the goal of building 35,000 starter homes before 2025.
Noting that Utah’s “kids will never to able to call Utah home if we don’t start building starter homes again,” Mr. Cox also explained the single greatest threat to generating “prosperity, the American dream, and strong communities is the price of housing.”
His new operating capital budget allocates $150 million towards enhancing the state’s First Time Homebuyers Assistance Program, $75 million toward a state infrastructure bank to provide low interest loans for construction of public water, sewer, and roadways to support housing construction, and other provisions.
There’s opposition, mostly from the standpoint that government shouldn’t be picking winners and losers with tax dollars, but at least Cox started a conversation addressing a critical housing need.
Georgia is not Utah for sure.
But Georgia is sitting on a $10.7 billion surplus for 2023. And if Georgia can suspend the state gas tax to support the consumer and implement a film tax credit costing $1 billion in tax revenue each year, according to the AJC, then it can certainly afford to take steps to bring affordable housing to all of Georgia.
Georgia needs to get the “apartment to starter home to larger home” wealth building conveyor belt going again.
After all, less is not more in housing.
Gary Wisenbaker is a REALTOR® with Century21 Realty Advisors in Valdosta, Georgia. He can be reached at (912-713-2553) or gwisenbaker@C21realtyadvisors.com
