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Walker Webcast: Ivy Zelman Sees the Housing Demand Pendulum Swing
Her research firm was launched in 2007 on the cusp of the housing bubble that would eventually lead to the Great Recession. Thirteen years later, amid a pandemic-driven downturn that was unprecedented in its swiftness, Zelman & Associates CEO Ivy Zelman views an entirely different set of market and demographic dynamics at work.
This week’s guest on the Walker Webcast series, Zelman sees the single-family market in ascendancy while multifamily confronts headwinds that weren’t blowing during the 2008-2009 downturn.
Some of those headwinds blew in with the pandemic, notably the move away from the urban core. Others—a coming glut of Class A supply and the aging of the Millennial cohort into family-starting and home-buying mode—have been gathering force for some time.
“Right now, multifamily is really feeling a perfect storm,” Zelman told Walker & Dunlop CEO Willy Walker. She predicted that the sector would need three to five years for supply and demand to become better aligned. However, she also called the apartment sector a “terrific asset class.”
By contrast, single-family has the opposite problem in terms of new supply: there isn’t enough. That’s especially the case in the class of product that’s most urgently needed—namely, affordably priced homes, the single-family equivalent of the workforce housing that Zelman said represents the best bet currently in the multifamily space.
Although builders are putting up these lower-priced homes as fast as they can, Zelman estimated the new stock is about 20% to 25% of what’s needed.
The National Association of Realtors reported last week that July marked the second consecutive month of significant monthly gains in existing-home sales, the ongoing pandemic notwithstanding. Zelman attributed this in part to the effects of the pandemic: with going out to restaurants or the movies still not an option in many markets, housing is getting a bigger share of wallet.
“People are nesting,” she said. “Your home is your castle.”
On-demand replays of the August 26 webcast are available by clicking here.
For comments, questions or concerns, please contact Paul Bubny
- ◦Economy
