Home Builders are Betting Big on the Sun Belt

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In housing news, some home builders are betting big on the Sun Belt, believing its long-term appeal can outshine challenges like rising mortgage rates and recession fears. The region, known for its warm climates, job growth, and favorable tax laws, continues to draw young families and retirees.

Nationwide, housing starts have slowed, with high mortgage rates cooling demand. But home builders remain optimistic. ‘From Florida to Texas to Arizona, some home builders are betting that the long-term lure of the Sun Belt can overcome even elevated mortgage rates and new concerns of a recession,’ says Sean Salter, a real estate researcher. He notes that the region’s affordability attracts buyers from higher-priced areas like California, who can pay cash or take out small loans, making them less sensitive to rate hikes.

However, there are concerns. The Sun Belt’s extreme summer heat and high insurance costs in areas like Florida pose challenges. Analysts like Jack McCabe warn of a potential housing downturn nationwide, yet some Sun Belt projects might avoid the worst.

Builders are targeting the booming Dallas-Fort Worth area, with developments underway across Texas, Florida, and Arizona. As David O’Reilly, CEO of Howard Hughes Holdings, highlights, new homes offer better value with incentives and lower costs, making them more appealing than existing homes. Despite economic uncertainties, the Sun Belt’s housing market remains a bright spot in the industry.

Introducing NYC’s Largest “Passive House” Complex

In East Harlem, New York City’s largest ‘Passive House’ complex, Sendero Verde, is setting new standards for affordable housing. This 709-unit complex, completed in April, offers low-income and formerly homeless residents a model for sustainable living. The building’s design uses half the energy of typical buildings, thanks to features like advanced insulation and ventilation, creating quiet, comfortable spaces with stable temperatures year-round.

Phoebe Saldana, a resident, praises the building’s cool interiors during the summer heat, saying, ‘It’s amazing. I never turn off the air conditioning.’ In the winter, she enjoys warmth without drafts and barely notices the noise from nearby trains.

This complex is not just energy-efficient; it’s a community hub with gardens, fitness centers, and social services. Jonathan Rose, one of the developers, calls it a ‘community of opportunity,’ emphasizing the responsibility to provide resilience for residents against extreme weather.

With Passive House projects growing in New York and the call of leaders to “revolutionize the housing market”, supported by government incentives, this complex showcases how affordable housing can also be sustainable. As the city moves toward all-electric buildings, Passive House principles are seen as a key strategy to reduce energy use, improve health, and lower utility costs. 

As Sadie McKeown from the Community Preservation Corporation notes, ‘This is the way all affordable housing should be developed.’ Sendero Verde may well be a blueprint for future housing developments nationwide.”

Real Estate Agents name the Top 7 Worst Places to Buy a Homes

And finally, According to some real estate agents, there are seven states buyers should avoid when buying property over the next five years due to rising costs, climate risks, and economic challenges.

California is at the top of the list, despite its allure. Real estate expert Yawar Charlie warns that affordability issues, combined with natural disasters like wildfires and droughts, make homeownership increasingly difficult, especially in high-demand areas like the Bay Area.

In Florida, retirees may see a sunny paradise, but the state’s vulnerability to hurricanes and rising sea levels could turn that dream into a costly nightmare, with skyrocketing insurance premiums and potential property value declines.

Illinois is also a concern, with some of the highest property taxes in the nation and rising crime in Chicago. Charlie notes that financial strains and budget deficits could drive residents to seek more stable environments.

Louisiana faces significant risks from hurricanes and flooding, along with slower job growth and infrastructure challenges, making it less appealing for long-term investments.

New Jersey struggles with high property taxes, corporate exoduses, and heavy traffic congestion, particularly for those commuting to New York City, which adds to the daily stress of living there.

In New York, beyond the high cost of living, aging infrastructure and a shift to remote work are prompting many to move away from the city.

Lastly, West Virginia‘s declining coal industry has left many areas economically devastated, leading to a population drain and low demand for housing.

 

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