Perhaps I find these articles because I’m watching for them, but I seem to see another article every day highlighting the housing crisis. “When Private Equity Becomes Your Landlord,” “There’s One Affordable Home for Every 350 Middle Class Homebuyers,” “US Housing Affordability Worsens” are articles I’ve seen just in the last few days. How did we get to a place where 20 people bid for the same house and the winner is the one investor who pays cash?

As they say, it is a perfect storm with a number of factors contributing to the inventory shortage. I am familiar with Teaneck, so I will address the local housing market, but I’m sure it’s similar all over.

Most new construction has been for rental.

An influx of investor buyers is reducing inventory for owner occupiers.

People who would typically downsize, thereby providing inventory, have no homes to buy and are therefore staying in their homes. These same people have also benefited the last few years from stock market appreciation and can afford to buy second homes in Florida and Long Branch without needing to sell their primary home.

COVID pushed many city dwellers into becoming suburban buyers and the limited inventory had to support a new group of buyers.

Is there any reason to assume this trend of reducing inventory will change? As explained in a recent article by Nechama Polak, the low inventory has been happening gradually for years. She explained that the inventory on Feb 16, 2017 in the local area was 298 homes while this year on that date it was 60 homes. More importantly, prior years saw a steady decline. In addition, with over 700 new rental units in Teaneck from recent development, it’s likely many of these tenants, not to mention those on Ayers court and State Street, will be competing for the same houses, further exacerbating the imbalance between buyers and sellers.

What is the solution?

1. You could look elsewhere. There are more affordable communities throughout the country. Go to the OU community site to explore those options. https://www.ou.org/communities/

2. If you want to remain in the NY metro area, I feel the only option is new construction.

Developers are building rental units because there are tax benefits and they would prefer to earn annual income and appreciation, rather than a short term sale. They are investing for the future. The builder is taking the risk of buying the property, paying for the approval process, building the homes, all without knowing with certainty that he has customers. Therefore, the builder has every right to determine what he wants to build, to maximize his appreciation potential and if he does decide to sell units, he will obtain the highest price the market will pay.

What if he knew he had buyers for a project before he started? What if he was approached by a group who secured a particular property with approvals and he simply was hired to do the construction? He would build what they want built and the builder’s premium would be less, reducing the cost to the buyer.

Who am I trying to address with this article? Here are some examples of possible participants but at this point anyone should join in the conversation.

A group of 7-10 people looking for custom homes. We would find a property that accommodates single family homes, near a shule with access to schools and kosher food. This wouldn’t necessarily be in the heart of town but close enough and with enough homes to create a cohesive core community.

A building for 55 and older to serve as a home for people who wish to downsize but to still have ownership and to be near their children. This could more likely be condos than single family homes.

First time home buyers looking for more affordable homes where perhaps a townhome would meet their needs. There is a townhome development proceeding in town that might be the answer for some homebuyers.

Drive around Teaneck and surrounding areas and, if you look carefully, you’ll see possible projects that could satisfy these needs. Developers are doing this, and more and more projects will occur. They likely won’t meet your needs, or the price tag will be hefty.

You’re not a developer, so there is nothing you can do except continue to be a tenant or overpay for a home, right? I suggest that, as the person paying, you have tremendous power. Alone that isn’t the case, but by joining with the many others in the same situation, you can take action and influence the process.

If you have any interest in getting a better understanding of what we can do together, the first and simple step is to email me at the address below. I will send out a survey to try to get an understanding of what the consensus is looking for and to see if we can find enough people with similar interests to find a solution at least for some people.

Remember: Without you, this won’t work. In addition to completing a survey, you can help by coordinating a meeting at your apartment building. Perhaps your school would host a meeting since many of the parents are likely struggling with this issue.

There is no cost, no commitment and no obligation to email me. When people join together, they can accomplish great things. If this is important to you, please join in this effort by taking the first step.

David Siegel is a vice president of mortgage lending with Guaranteed Rate Affinity (GRA), a leading national retail mortgage lender. GRA is licensed in all U.S. states except Hawaii and works with many investors, which allows it to provide competitive pricing and a broad channel of unique options to handle the often very specific needs of the community. David has over 15 years of experience at both major banks and mortgage bankers and understands the guidelines of different lenders to help direct his customers to the best loan type for their needs. No one lender is the best option for everyone. David will help you find the right choice for you. He is located at 16 Arcadian Avenue, 3rd Floor, Unit C-6, Paramus, NJ 07652. Contact him via email at [email protected] or [email protected], or phone 201-725-9527.

NMLS 277243 Guaranteed Rate Affinity NMLS 1598647 Equal Housing Lender

For licensing, go to nmlsconsumeraccess.org, 16 Arcadian Avenue, 3rd Floor, Unit C-6, Paramus, NJ 07652. Licensed by the New Jersey Dept. of Banking and Insurance.