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Housing Dimensions Blog

by Rick Palacios Jr. and Ali Wolf

8% fewer homes will transact than normal in 2014, purely due to student debt.

This week, our clients received a 30-page paper that assesses the impact of student loans on home buying for households under the age of 40. Our conclusion is that 414,000 transactions will be lost in 2014 due to student debt. At a typical price of $200,000, that is $83 billion per year in lost volume.

Source: John Burns Real Estate Consulting, LLC

The analysis was quite complicated and involved a few assumptions, but we believe it is conservative, primarily because we looked only at those under the age of 40 with student debt.

At a high level, the math is as follows:

Finally, Intrinsic Value for Homes

by Sean Fergus

Have you ever asked yourself, "Are home prices over- or undervalued today?" If so, you have been comparing current prices to prices over the long-term trend, which is known as intrinsic value.

Many of the best investors in the world tout intrinsic value as the most important metric for long-term investing. Buy when prices fall below intrinsic value and don't buy when they rise above. The difficulties come in determining your opinion of intrinsic value and having the patience and courage to withstand what can sometimes be very long periods when prices are over- or undervalued.