Home Ownership isn’t dead. It MOVED.

I just got back from a quick trip to Arizona for a wedding.

One of the habits I have whenever I travel anywhere is to pull out my phone and look at zillow just to see what the average homes are selling for.

When I visit areas like Hawaii or California, I will dream about owning a cool vacation home someday only to have reality smack me in the face when I see all those 0’s…

Granted, that does not come as a surprise as often times I am looking at mansions or homes facing the beach. Of course those would be expensive.

However the numbers that I was seeing when I pulled up homes in your average Arizona track home neighborhoods SHOCKED me!

Then I started to drive to properties that I flipped over 5-10 years ago for fun… That was a reality check for me!

Oh what I would give to go back in time and hold onto all of those properties!

We were selling them regularly for $200,000 – $250,000… They were now selling for $650,000!

I was driving through areas like Queen Creek. Places that used to be at the edge of nowhere. Straight desert. It was a long boring drive to get there so this is where we built homes because the land was cheap and homes were very affordable.

Now?

Those same exact homes that we built and sold in 2019 for $500k are on the market today for $2M!!

Same neighborhoods. Same houses. Completely different reality.

And it hit me.

No wonder people feel like homeownership is out of reach.

If I still lived there, I would absolutely feel the same way.

Do you know what your payment would be today on a $2,000,000 home?

When home prices become this unaffordable, it can absolutely leave many to feel that the only “affordable” option is a townhome or condo.

And if you find yourself thinking you may go that route… I STRONGLY encourage you to not make that decision.

I have rarely met someone living in a condo or townhome that did not regret buying it instead of paying a little more to buy a single family home. But this is for another discussion.

So people now on social media are all saying, “I’ll never be able to buy a home.”

They just go on to vent and to blame the system, politics, all the boomers for sitting on the best inventory out there (with no mortgages to add insult to injury).

But here’s the truth.

That might be true where YOU live.

It’s NOT true everywhere.

There was a study out of UC Berkeley that tracked people who left California.

After moving, they were 48% more likely to become homeowners.

Isn’t that wild? These are people who grew up in CA, have family there and would like to live there forever but the reality is, it is just not possible for them to do so if they ever plan on owning a home!

So what do they do?

No different than what large companies are doing now more than ever…

They are leaving their origin states. And most of them are moving to the South. Texas – Florida – Tennessee – Georgia (In that order).

And these are MASSIVE COMPANIES who’s identity and brands are synonymous with the States they originate from!

Starbucks = Seattle. Starbucks spent over 50 years building in Seattle. Now they’re investing $100 million to expand into Tennessee.

Not because they want to. In fact it is going to be logistically very difficult. But because the taxes and environment in Seatle has made it nearly impossible to stay… So the opportunity shifted to the place where many businesses are relocating.

My favorite example is In N Out burger.

Here are the reasons why the In-N-Out CEO mentioned for the reasons why they chose to move to Nashville, TN:

Easier expansion into the Southeast
Population shifting east and south
Business environment and regulatory pressure in California played a role
Need a geographic footprint closer to future growth markets

I came back to Chattanooga yesterday and immediately started driving around to find additional properties to invest in.

And I was reminded quickly WHY I had to make the move to TN…More specifically Chattanooga where I saw the most room for growth over the next 10 years.

Here are a few examples of what I saw while driving:

Waterfront homes of Harrison Bay for $180,000. (Fixer upper 3/1 1500 sq ft).
Brick home in North Georgia on an acre for close to $100k. (fixer upper 3/1 1300 sq ft)
Buildable lots for 13-27k in North Georgia.

We can build a 3 bed, 2 bath home around 1,400 sq ft for about $200k including the land! These sit on an acre. Low taxes. Space to breathe.

These are real, every day prices that I see each week.

That’s happening right now.