DALLAS--(BUSINESS WIRE)--HomeVestors® / We Buy Ugly Houses® hosted a webinar with Mark Dotzour, former chief economist of the Texas A&M Real Estate Center, for its 1,100 franchises in 170 markets nationwide. In it, Dotzour acclaimed the current strength of the housing market, and predicted a long-term migration to the suburbs as a direct result of COVID-19.
“It’s going to put pressure on the downtown area,” said Dotzour. “People are going to want to have a little bit of space. I see a longer-term trend here of people moving out of the big-city density into the suburbs.”
Dotzour foresees that in the years ahead, Americans will move within 60 minutes of major cities as the historic benefits of dense urban housing and work arrangements are curbed by COVID restrictions. Additionally, as companies have broadly embraced work-from-home arrangements, previous homebuying considerations like concerns about commutes will fall in importance. He also predicted that record-low mortgage rates and a shortage of the most in-demand homes will drive a continued rise in home prices.
“I anticipate mortgage rates down to 2.5%,” said Dotzour. “It should be there right now. As mortgage rates drop further and further, it's going to allow prices to go up and up and up. And what's going to happen is, two years from now, people will go, 'Man. That's crazy. Even with mortgages at 2.5 percent, these houses aren't affordable anymore.’”
Dotzour suggested that appreciation will be most apparent in the bottom third of the market, which are the houses HomeVestors most often buys. More than 80 percent of houses purchased by its local We Buy Ugly Houses® people are less than 1,400-square feet and were built before 1980. Houses purchased are generally rehabbed, then sold or held as investment properties, helping raise real estate values and drive community revitalization. Dotzour added that it’s a position of strength for the company and its franchises.
“Single family homes in my mind have got to be one of the strongest investments you can buy. I can’t think of any segment of the economy that’s stronger than single-family housing right now, with the exception of making those 99 percent germ-free Clorox wipes. You’re not No. 1, but you’re right behind the Clorox wipes right now.”
David Hicks, CEO of HomeVestors, seconded this sentiment. As iBuyers like Zillow and Opendoor suspended home buying for a time during quarantine, the original and only We Buy Ugly Houses company, continued to purchase houses and close on existing offers. Nearly half of home sales annually occur between March and June, and HomeVestors, America’s number one home buyer, felt a great responsibility to sellers still needing to sell.
“We were trying to figure out our new world because we wanted to still be personally interacting with sellers to buy houses,” said Hicks. “And as long as we can buy, we can sell. Our franchises are selling everything they’re buying and are selling for a little bit more money. We have a national franchise group that is very resilient and resourceful that has figured out how to do business in this market.”
About HomeVestors of America, Inc.
Dallas-based HomeVestors of America, Inc. is the largest professional house buying franchise in the U.S. with more than 100,000 houses bought since 1996. HomeVestors recruits, trains and supports its more than 1,100 independently owned and operated HomeVestors® franchisees that specialize in building businesses based on buying, rehabbing, selling, and holding residential properties. Most commonly known as the "We Buy Ugly Houses®" company, HomeVestors strives to make a positive impact in each of its 176 markets. The company ranked on the 2019 Inc. 5000, has appeared for 12 consecutive years on the prestigious Franchise Business Review's "Top Franchises”, for eight years on the annual Dallas 100, and ranked 159th on the 2019 Franchise Times Top 200 Franchise Chains by Worldwide Sales. HomeVestors has also been regularly recognized by Entrepreneur Magazine, which most recently ranked it as the 20th fastest-growing franchise, named it as one of the top 200 franchises of 2020, and placed it at number 30 on its annual Franchise 500. For more information, visit www.HomeVestors.com.