Hopefully, everyone read part one and part two of my last two weekly columns. If not, read the first two before reading this week.
As the new generations, X, Y, and other new “labeled” groups jump into the housing market creating more competition and potentially at a greater speed than what is currently happening; our inventory will be further stressed and instead of increasing, as is normal in most real estate cycles, will be further decreasing unless builders step up their game and produce more housing and at a faster pace to come close to trying to satisfy the future demand and needs of families and individuals.
Moreover, add all the foreign nationals, investors and those who “want and need” to relocate to the U.S. legally. This too will be a huge issue for developers to keep up with such greater demands going forward.
The federal and state governments need to sit down – which is as challenging as it gets today between the Democrat and Republican Legislators – to work out as solid a plan as possible to be able to provide whatever benefits that can be created and devised in a non-partisan fashion to help those builders, especially in those areas that are not doing as well, eg. depressed areas and locations where there is land to build upon and in those downtowns that need a shot in the arm, as they have been doing on Long Island in Patchogue, Lindenhurst, Islip, Amityville, Farmingdale, Freeport, Rockville Centre, Long Beach, and other towns, not only here but across the U.S.
To be able to keep our most crucial and critical younger generation and other new residents into our country here in New York, affordability is the name of the game. When a purchase occurs, this always leads to an economic benefit to not only the local area but to our vast economy. People begin to buy refrigerators, stoves, dishwashers, washers, dryers and so many other capital goods and this is what begins to create more jobs here.
However, without the necessary housing inventory, things tend to slow down. There are areas throughout the U.S. where populations are growing, as I mentioned a few months ago about where millennials and others are moving to and away from New York, down south, Virginia, North and South Carolina and out west, Texas and Washington State to name a few.
Taxes are very high here in New York and with all the money we provide the federal government, for every dollar, we give we only get back seventy cents; so where is the equity in that equation?? Why are we supporting other states, sort of like welfare, right?
Each state should be self-sufficient on its own, don’t you think? In order to be able to have the thirty-five percent who rent and stand a chance at the opportunity to be able to be in an ownership position, wages must go up to a point of being able to afford to purchase.
Those individuals who are earning from minimum wage up to twenty-five dollars per hour (as long as there are two wage earners and debt/income less than 60 percent) may have a shot at ownership. But what are the percentages of renters that are earning that amount per hour? Anyone making fifteen dollars per hour cannot ever purchase based on the cost of living, eg. rent, food, car payments, insurance, etc.
As I said last week, the wealthiest among us should pay more of a living wage and in return, I believe we will see a more efficient and potentially greater quality and production. This will lead to happier and less stressed out employees and potential increases in sales, and in turn, whatever you give in higher wages you should get back in your pocketbook.
You will still be rich and maybe a little less wealthy, or maybe not, if higher production and sales goals are met and accomplished, your investment in your employees, will put that money right back in your bank account!
Most important is training, mentoring, advising and support that will greatly benefit the companies who follow that course of action. Down payments just might be easier, although they are currently a sticking point for most, but for some being able to dip into their pensions, 404K’s, SEP’s, etc. to take out that necessary money without any penalty is an easy path to pursue, assuming there is enough money there to utilize.
Ownership leads to a greater, more productive economy and also allows those to become “middle class” as we have been losing that segment of our population for so many years.
According to the census bureau with an American Community Survey, about 6.9 percent of the population earn more than $200,000 per year. Do you think that categorizes a family as rich? Here is an excellent article I read which really defines where we are and what the possibilities are in taxing our population. Here is the link: https://www.nbcnews.com/think/opinion/here-s-why-middle-class-must-pay-more-taxes-not-ncna805606
I firmly believe increasing the threshold for a minimum tax should start above $250,000 per year. I also believe that the top one percent should pay more too and this would surely not affect their lifestyle one iota! This would also aid those in saving for their down payments leading to becoming a homeowner. It would enable those that are entering our country to save more money and to become owners at a faster pace too. Even more, grant money with “sweat equity” involved by the purchaser to perform either community service or provide a certain number of hours working in the public or private sectors and at the same time benefiting employers.
All this would allow our economy to flourish for years to come and become the shining example of what it is today and for a greater number of citizens and those about to become citizens.
Right now those renters are being shut out of the ownership arena. Internationally our reputation for those who want to live and invest would be elevated that much more from where we stand today.
Lastly, can the federal and state governments cut their expenses and save and conserve all those wasted dollars as families and individuals always must do when there is less money to spread around. Why can’t they do the same? Well, that is easy for them, for whenever they want a raise, it’s easy, increase the current taxes or create another way to add to their coffers! Lastly, figure out how we can get those in the 35 percent club to be able to purchase and our economy will go through the roof and will greatly benefit many more who will realize the “American Dream of Ownership.”
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has earned designations as a Graduate of the Realtor Institute and a Certified International Property Specialist.
He can be reached by email: Phil@TurnKeyRealEstate.Com, or by cell: (516) 647-4289 to answer any of your questions, concerns or suggestions for his weekly column.