A fourth of Americans are living in multigenerational households, but current housing stock needs to adapt to the population’s changing needs.

Multigenerational housing has become commonplace, and many Americans even show a preference for it, experts said at the Urban Land Institute’s 2022 Fall Meeting in October. In fact, a quarter of Americans in 2021 lived in a multigenerational household, according to a study(link is external) from think tank Generations United. (A multigenerational household is defined as members of three or more generations living under one roof.) This means the market for multigenerational homes is a large and expanding source of business for real estate professionals.

The reasons vary for why people choose to live with multiple generations of their family, said Helen Foster, principal of real estate development firm Foster Strategy. Economic factors and cultural background are main drivers, and the number of multigenerational households is rising with uncertainty in the economy. “As rent pressures continue to increase, we’ll see more of this type of living situation,” Foster said.

Conceptually, communities could be restructured to foster multigenerational living as an answer to the home affordability crisis, said Daniel Parolek, author of Missing Middle Housing: Thinking Big and Building Small to Respond to Today’s Housing Crisis. However, he added, multigenerational housing needs to meet three standards in order to truly meet the needs of the population: accessibility, adaptability and affordability. 

Standard One: Supporting Accessibility

Supporting multigenerational infrastructure means creating communities “where ages 8 through 80 can thrive,” said Michael Spotts, a research fellow at ULI’s Terwilliger Center for Housing. Accessory dwelling units, senior living spaces and adaptable single-family homes need to be available in order for a multigenerational community to work, said Rodney Harrell, vice president of family, home and community at AARP. Right now, the missing link is a focus on the elders’ needs. “By 2034, for the first time in U.S. history, we’ll have more people over 65 than under 18,” Harrell said. “What that means is that every community across the country will have people of all ages, and we haven’t had to wrestle with that before.”

Up until this point, community planners and developers have focused on meeting the needs of younger families without much thought regarding an aging population. This, says Parolek, is where master planned communities need to change. Part of that change requires bringing back housing typologies like duplexes, accessory dwellings and cottage courts.

But accessibility isn’t just about the types of housing available. Mobility is another important factor, said Spotts. Communities need to take into account how various age groups get around. “Some people will need to drive; some will want walkability,” he said. “We must build to suit both.”

Developers also need to think about how transportation affects the people who live in these communities. Spotts used the example of his own neighborhood, which he said is very “automobile-centric.” He said he doesn’t necessarily feel like his child is safe out riding a bike or crossing the street because of traffic. Fully functional multigenerational communities must include public transportation to consolidate traffic, but it shouldn’t be overcomplicated. “Buses work,” Spotts said. “They are adaptable and accessible.”

Location matters as well when planning out multigenerational communities. How close a community is to a downtown core will change the housing typology, Parolek said. “One size does not fit all. Location and context matter. Is public transit or Uber accessible? Parking might drive design. The closer you get to a downtown core, the smaller the space. Is mixed-use necessary?” Demographics, socioeconomics and location should all drive the specifics when designing a community catered to multigenerational living.

Standard Two: More Adaptable Spaces

Multigenerational communities must adapt over time as residents change. Kids grow up and move out. Some of them return home. Older generations pass on. Housing structures need to adapt to meet the need. Parolek used an example of a more versatile single-family home: “The main dwelling houses the core family unit. Then, there’s a wing for the grandparents and a third unit over the garage for boomerang kids or to rent out. The space includes a shared courtyard. So, in this single space, there are three distinct units that function as one unit or close off for privacy.”

Likewise, Parolek said there’s much value in a community that utilizes multiple adaptable housing typologies together. Cottage courts provide each generation with an individual cottage and shared community space, usually a courtyard or patio. Duplexes provide proximity without limiting privacy. Live-work spaces improve accessibility and proximity.

Adaptability isn’t reserved for living spaces, though. Neighborhood design and accessibility to grocery stores, offices and shopping is important, too. One of the big questions that remains in creating a truly working multigenerational community is how office, retail and warehouse spaces can become adaptable to accommodate shifting needs as the community ages.

Standard Three: Addressing Affordability

Multigenerational communities need child care workers, home health aides, housekeepers and grocery store workers to meet the needs of households. But these are lower-paying jobs that often can’t fully support workers. Spotts said recent ULI research(link is external) found that child care providers and home health aides “couldn’t afford to rent a one-bedroom apartment on the median wage anywhere in the country.”

Seniors find themselves facing affordability issues as well, Harrell said, adding that “as of 2019, 10 million adults ages 65 and older were housing cost–burdened.” Communities need to bring back the missing housing types, but it won’t be enough, Parolek said, adding that “zoning barriers [are] the biggest thing that needs to change to make missing typologies a possibility.” Builders and developers need incentives to construct affordable units that works for them and for the end user. Technology needs to expand outside the home and into the community itself, and infrastructure needs to be built in a way that allows for adaptation over time—which reduces costs, the experts said. A concerted, multi-solution approach is necessary to make affordability a reality and, thus, multigenerational living a viable option.

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©National Association of REALTORS®
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The third quarter may have marked the end of price surges as higher mortgage rates put a damper on projections for property appreciation. Read more from NAR’s latest report.

Home prices continued to climb in the third quarter of this year, but the upward trend may finally be coming to an end, according to the National Association of REALTORS®’ latest quarterly report. Higher mortgage rates are starting to weigh on home price growth, though practically every major metro saw home prices rise in the third quarter. Forty-six percent of the 185 markets that NAR tracks even registered double-digit increases.

The national median price for a single-family existing home was $398,000 in the third quarter, an 8.6% jump from a year earlier. That’s a slower pace than in the second quarter, when the median price was 14.2% higher year over year. More easing is expected over the next few months, says NAR Chief Economist Lawrence Yun. “Much lower buyer capacity has slowed home price growth, and the trend will continue until mortgage rates stop rising,” he says. “The median income needed to buy a typical home has risen to $88,300. That’s almost $40,000 more than it was prior to the start of the pandemic.”

Meanwhile, the monthly mortgage payment on a typical existing single-family home with a 20% down payment swelled to $1,840 in the third quarter, up 50% year over year. The 30-year fixed-rate mortgage is currently above 7%—double what it was a year ago—prompting house hunters to revisit what they can afford. The typical family now needs a qualifying income of at least $100,000 to afford a 10% down payment on a mortgage in 59 markets, up from 53 markets in the second quarter. Further, a family with a qualifying income of less than $50,000 can afford a home in just 17 of the markets NAR tracks, down from 23 in the previous quarter.

First-time home buyers are struggling with these dynamics. A typical starter home worth about $338,700 would have a monthly mortgage payment of $1,808 with a 10% down payment, an increase of nearly $600 compared to a year ago. First-time buyers typically spend nearly 38% of their income on mortgage payments; most financial experts consider households financially burdened when they spend more than 25% of their income on housing.

Where Prices Are Rising the Most

Some of the priciest markets in the country, like the San Jose and San Francisco areas in California—with a median home price of $1.7 million and $1.3 million, respectively—could see some cooling in the months ahead. “The more expensive markets on the West Coast will likely experience some price declines following this rapid price appreciation, which is the result of many years of limited homebuilding,” Yun says. “The Midwest, with relatively affordable home prices, will likely continue to see price gains as incomes and rents both rise.”

The South not only saw the highest share of sales of existing single-family homes in the third quarter but also the highest year-over-year appreciation in the country, NAR’s report shows. Prices jumped 11.9% in the region, followed by an 8.2% increase in the Northeast, 7.4% in the West and 6.6% in the Midwest.

The following 10 metros posted the largest year-over-year price increases in the country in the third quarter:

• North Port-Sarasota-Bradenton, Fla.: 23.8%
• Lakeland-Winter Haven, Fla.: 21.2%
• Myrtle Beach-Conway-North Myrtle Beach, S.C.-N.C.: 21.1%
• Panama City, Fla.: 20.5%
• Deltona-Daytona Beach-Ormond Beach, Fla.: 19.6%
• Port St. Lucie, Fla.: 19.4%
• Greenville-Anderson-Mauldin, S.C.: 18.9%
• Kingsport-Bristol-Bristol, Tenn.-Va.: 18.8%
• Tampa-St. Petersburg-Clearwater, Fla.: 18.8%
• Ocala, Fla.: 18.8%

©National Association of REALTORS®
Reprinted with permission

Every real estate pro makes these errors at one point or another. But you have to learn how to prevent them in the future to keep your business viable.

Even the venerable Leigh Brown, a prolific real estate speaker and broker-owner of One Community Real Estate in Concord, N.C., has experienced dry spells in her business. Surely, you have, too, and it’s at those moments that you need to shift sales strategies. “I’ve spoken with agents in four countries and 49 states, and the story is the same,” Brown told attendees Friday during a session at NAR NXT, The REALTOR® Experience(link is external) in Orlando, Fla. “All REALTORS® are entrepreneurs, and they think they’re doing things differently and better when, in reality, they’re all making the same mistakes.”

Brown called these pitfalls the “7 deadly sins of sales”—business errors that every real estate professional makes at one point or another. However, these mistakes can be remedied. Brown presented a roadmap for correcting them.

Sin Number One: Ego Over Substance

Referencing Instagram posts in which agents share photos of their many awards with a caption that states how “blessed” they are in the industry, Brown noted that this kind of “humblebrag” isn’t endearing to the consumer at all. “Every time you do this, you’ve told the consumer that you care more about yourself than you do them,” she said. If you wouldn’t say it at the closing table or the listing appointment, don’t say it in an email or a social media post, she advised.

Instead, make your marketing about what the consumer wants and needs as well as how you’re the agent to help make their dreams a reality. “You differentiate yourself through your own substance,” Brown said. Remember that for most people, buying a home isn’t about making money or investing; it’s about building memories and having stability. Brown also said that before you make any kind of social media post, ask yourself: “What’s my desired outcome from this post?” Determine whether or not the post aligns with your goal.

Sin Number Two: Lack of Value in Yourself

Before you can communicate your value to consumers, you must first believe that what you bring to the table is valuable. The first step is to treat yourself and talk about yourself as a person of value and worth, Brown said. “Let the customer know that your value lies in everything you’ve done to prepare yourself as a professional: the certifications, the education, the vast network of local experts and the memberships. Rather than make the job look seamless, articulate what you’re doing to ensure the process runs smoothly for the client. They are paying you for the depth that you bring. You’re hurting yourself by making your job look easy. Use transparency instead.”

Sin Number Three: Abandonment

In a relationship business like real estate, your customers often become your friends. Organic bonds are created in the trenches of the home search and the transaction. “You love your clients while you’re working with them,” Brown said, “but then what happens when the transaction is over?”

It’s easy to fall out of touch. Then, five years later, when you see that your customers have enlisted the help of another agent to sell their home and find them another, you feel betrayed. “Clients have lives. They have aging parents and children. They’ve all gone through the same pandemic that you have,” Brown said. It’s important to make regular, consistent follow-up an integrated part of your business practice so that you stay top of mind when the need arises. “Pick a CRM, get trained on it and use it. Figure out how you want to follow up.”

Sin Number Four: Ignoring the Phone

It may be easier to send a text or email than to call a client—but it shouldn’t be. In fact, Brown said, picking up the phone is one of the easiest things you can do to show you care and to market yourself. “Be yourself, and be professional,” she said. When you answer the phone, state your first and last name as well as your company name, Brown suggested. That way, when you’re out in public, say, at a grocery store, members of your community will make the connection.

There are, however, a few instances when it’s OK not to answer your phone:

• When you’re in front of a potential customer who you’re hoping to convert a client.
• When you’re out on date night with your significant other or during planned time off.
• When you’re with a client with whom you’ve built a relationship, only answer the phone if you need to address an emergency and only if you’ve asked your client for permission to do so.

Sin Number Five: Living Paycheck to Paycheck

The real estate industry isn’t known for financial frugality, which can cause personal and professional issues. Brown suggested putting money away in four separate accounts based on a percentage breakdown:

• 40% goes into a business account where business expenses are paid out.
• 30% goes into a personal account, which is used for paying bills like your mortgage and car note, buying groceries, eating out with the family, etc.
• 20% goes into an account dedicated to paying quarterly taxes so you’re not surprised with a huge tax bill in April.
• 10% goes into an account for charitable contributions to organizations and causes that you want to support. “If you wait to contribute until you ‘have the money,’ then you’ll never contribute,” Brown said.

This is just one of many approaches to financial wellness, which is necessary to weather market changes and create financial stability. No matter how you approach your finances, Brown said, it’s important to hire a bookkeeper, make a plan and track where your money is going.

Sin Number Six: Cherry-picking

In a changing market, there’s no room for being picky about which types of clients you’re willing to work with, Brown said. Plus, doing so might put you in danger of a fair housing violation. One way to ensure you’re not implicitly weeding out clients is to standardize the way you collect information. Use an intake sheet for each and every inquiry. Start conversations with the same questions. This way, everyone starts on the same footing when they reach out to you. If you’re not taking on certain kinds of transactions because you don’t know what they entail, use your network. Find the expert in that kind of home sale and leverage their knowledge.

Sin Number Seven: Inverted Priorities

Yes, you’re a real estate professional, but that’s only one small part of what’s important to you in life. “In the last three years, you’ve worked 24/7. Now you have to dial into an entirely different set of market and economic conditions. Put the people in your life at a higher priority than the transactions,” Brown said. In a relationship-fueled business, we often forget about the relationships we cultivate with those closest to us. “Put your phone in airplane mode. Look people in the eye. Go on vacation with your family,” Brown suggested.

©National Association of REALTORS®
Reprinted with permission

Many under the age of 40 are looking at real estate as a means to generate income rather than looking for their own home to live in, a new survey shows.

A growing number of young adults are charting a different path toward building wealth through homeownership, prioritizing buying an investment property before a primary residence, according to a new survey by Mynd, a company that leverages technology tools to help investors buy, finance and manage single-family rental properties.

Forty-three percent of people younger than 40 say they are considering becoming “rentvestors,” who continue to rent their own home while shoring up income from an investment property, Mynd’s 2022 Consumer Insights Report(link is external) shows. That compares to just 9% of baby boomers and 27% of Gen Xers who are using the same wealth-building strategy. Some first-time investors see this as an opportunity to make more money and better afford a lifestyle in larger, more expensive markets, the report notes.

“Young people are discovering that buying an investment property gives them the best of both worlds: They can live wherever they want, including cities where they can’t yet afford to buy, and still become property owners, which, as we learned in our survey, is still considered an important part of their American dream,” says Mynd founder and CEO Doug Brien. “Buying an investment property means they can go where their life, their work and their sense of purpose takes them without being tied down, and they can still benefit from the diversification, appreciation and tax benefits of real estate investing.”

As the economy teeters on the brink of recession, diversifying a portfolio may become a bigger priority for prospective buyers. Brien notes that many millennials, who came of age during the Great Recession in 2008, watched their parents and others face great financial loss because they were overleveraged on their mortgages. “This cohort is also more skeptical of the stock and bonds market,” Brien says.

But young adults appear optimistic about real estate’s long-term potential. Brien says he believes many of the younger people buying investment properties don’t necessarily view it as a step toward purchasing a primary residence but as an investment that will live alongside their home one day.

The Remote Investor

Remote investing is another trend helping more first-time investors take the leap. More than half of the properties Mynd manages are owned by out-of-state investors. The company has predicted that number to grow as technology makes it easier to buy and manage investment properties from afar. That doesn’t appear to be a scary thought to consumers: Seventy-two percent of the more than 1,000 survey respondents say they’d consider buying an investment property in a different city or state than where they live.

“For decades, the real estate investment class was seen as too complicated and intimidating for many consumers,” Brien says. “Fast forward to today: Consumers now have access to a slew of tools and platforms that demystify the real estate investment process.” He added that Mynd’s mission has been to help inspire a new crop of investors “who were previously too intimidated by real estate or were constrained to investments within commuting distance.”

Tech property management companies have been introducing tools to help novice and experienced investors alike find, finance, purchase and manage properties remotely.

As recession fears mount, single-family rental investments could grow into an even more attractive asset class, Brien says. “As inflation rises, rents are bound to rise, which increases potential cashflow for property owners.” Twenty-eight percent of survey respondents say they’re considering purchasing an investment property now, despite the current economic climate. “As the Federal Reserve increases interest rates in an effort to tamp down inflation, that can impact demand for rental homes, too,” Brien says. “If it becomes more expensive for potential buyers to finance a purchase, fewer will be able to afford it. This will increase demand for single-family homes and create more upward pressure on rental prices.”

©National Association of REALTORS®
Reprinted with permission

NAR’s 2022 Technology Survey reveals the innovations members are using now and watching for the future.

REALTORS® believe cybersecurity, 5G and drones are the areas of technology that will have the most impact on the real estate business in the next two years, according to the National Association of REALTORS®’ 2022 Technology Survey. Nearly half of REALTORS® also believe the metaverse will have ramifications for real estate. Thirty-five percent say blockchain technology will “definitely” or “probably” have an impact.

The three tools REALTORS® say they currently use most in their business are e-signatures (79%), lockboxes (67%) and MLS apps and technology (67%), the survey shows. REALTORS® also say social media delivers the highest number of quality leads—even more than their CRM systems, digital ad campaigns or the MLS.

“It’s clear that technology plays a key role in our members’ lives and businesses,” says NAR CEO Bob Goldberg, noting the association’s efforts to keep REALTORS® on the cutting edge of real estate innovation. This year, NAR’s Innovation, Opportunity & Investment (iOi) Summit, for example, addressed how real estate pros can help tech developers improve their products. NAR also supports up-and-coming innovations in the real estate space through its REACH tech accelerator program. “NAR has its eyes on the future,” Goldberg says. “By partnering with innovation leaders and empowering REALTORS® with the latest technology, we’re driving the future of real estate and helping our members build staying power.”

How Much Do REALTORS® Spend on Tech?

With technology an essential part of real estate pros’ toolbox, many are spending more money to purchase and use solutions. About one in three REALTORS® say they spend between $50 to $250 per month in costs related to technology, while 19% say they spend more than $500 per month, according to the survey. The majority of those expenditures are for lead generation tools. The following chart shows how much REALTORS® are spending monthly on lead generation:

Survey respondents say that of the tech tools their brokerage provides, e-signatures, lockbox and showing technology, and transaction management systems are the most valuable. Some brokerages may charge a fee for this technology; 47% of respondents say their broker charges a “reasonable” fee while 38% say their broker does not charge a fee, according to the survey. “NAR continues to research, vet and champion the most promising new tech to ensure members remain at the forefront of new innovations and ideas,” Goldberg says. “At the heart of everything we do is an insatiable drive to empower our members by providing them with innovations that will impact their businesses for the better.”

©National Association of REALTORS®
Reprinted with permission

Despite an extremely volatile crypto market, one real estate pro says a decentralized financial system could help create more immediacy in housing transactions.

When she unexpectedly ran out of cash during a trip to Cuba, Kristin Smith knew her options for accessing more funds were limited. Without the ability to use a credit card or pull money from her U.S. bank account, Smith, an agent with Dave Perry-Miller Real Estate in Dallas, was told to call a contact in the U.S. who could transfer money to her via Western Union. Smith called her mother, who was immediately concerned. “I’m asking for money in Cuba,” Smith told attendees Saturday during a session at NAR NXT, The REALTOR® Experience(link is external) in Orlando, Fla. “[My mom is] asking, ‘Are you being held captive? Are you safe? Is this a ransom?’”

While the situation was eventually rectified, Smith found herself analyzing all the barriers she faced on the trip—which aren’t all that different from barriers when moving money around on the traditional market, she said. “What crypto is going to do is remove those barriers,” Smith posited. She offered a primer on the basic terminology related to cryptocurrency and its potential applications for real estate.

Important Terms in the Cryptocurrency World

• Cryptocurrency “is a digital currency in which transactions are verified and records are maintained by a decentralized system,” Smith said. The most commonly used forms of cryptocurrency are bitcoin and ethereum.
• Blockchain is the technology that enables cryptocurrency, acting as a shared, immutable ledger where you can record anything that is verifiable, including the title of a house.
• Within cryptocurrency, fungible tokens are interchangeable and identical, while non-fungible tokens each have a unique value. All bitcoins across the world have the same value, eds, are unique in nature and value.

Potential Cryptocurrency Applications in Real Estate

While cryptocurrency transactions in the real estate profession remain relatively uncommon, 12% of millennial home buyers sold cryptocurrency to fund their down payments in 2021, according to Redfin data. That stat underscores how popular and accessible cryptocurrency is with younger generations, Smith said.

A bigger opportunity could reside in putting title records, deeds and property surveys on the blockchain. Today’s county records are not all that different from blockchain, Smith said. Each title is recorded with the county, and when the title is sold, the county verifies and records that exchange. By adding title records to the blockchain, each record (or block) would be verified on the blockchain every ten minutes, said Smith. This could greatly speed up the time it takes to accurately verify title records and finalize transactions.

Smith predicts that over the next five years, REALTORS® will begin to see “double reporting,” as titles are recorded both with the county and on the blockchain. “I think the county [records] will slowly phase out because they’ll become a part of the blockchain,” she said.

Weighing the Volatility and Utility of Cryptocurrency

Smith did note that it’s “not the most fun to speak on crypto when the market is tanking,” referencing the collapse of FTX(link is external) last week. FTX was one of the world’s largest cryptocurrency exchanges until it filed for bankruptcy. Between its downfall and the volatility of the crypto market in general—bitcoin has traded at between $16,000 and $67,000 in the last year—many wonder if it’s wise for the real estate industry to normalize and advocate for cryptocurrency.

Smith, who is the chair of a National Association of REALTORS® presidential advisory group studying the impact of digital money in real estate, agrees that more information and guidance is needed. Her PAG is recommending the formation of a full NAR committee to look into cryptocurrency. “We should probably have a ‘decentralized finance’ committee,” Smith said.

The Future of Cryptocurrency in Real Estate

Until such a committee is created, Smith recommended that real estate pros use their best judgment when considering cryptocurrency investments or exchanges. “The number one thing to ask is: What is the utility of this? Does this actually do something?” This could help REALTORS® differentiate between an NFT, which Smith said has a more limited application and therefore more limited value, and the application for title and blockchain, which could fundamentally alter the title and real estate industries. “Why does a home transaction take thirty days? It’s the title search. If the title was on blockchain, transactions could be instant. This is your money; you should have it now,” Smith said.

©National Association of REALTORS®
Reprinted with permission