Conference Presentation, Fireside Chat
Easing the Housing Crisis by Building Better Tools
- Adina aims to make homeownership accessible by first proving the business model in Cleveland, Ohio, before expanding to markets that maximize individual reach and investor returns, while explicitly excluding the San Francisco and New York metros.
- The company will cover all maintenance, taxes, and insurance costs for customers in its rent-to-own program and provide free credit counseling.
- Divi has established a cap of 6% annually on appreciation for buyback prices to ensure good returns for investors, which the speaker notes is essential for success.
- The company intends to engage in a dialogue with regulators, specifically seeking to sanity check assumptions with the CFPB, though it currently lacks specific guidance on government relations contacts or communication styles.
- Market predictions indicate a year-on-year decline in home prices of 10% to 15% beginning in Q1, following an 8% year-on-year increase that has since fallen from its peak, with transaction volume expected to be down approximately 20% year-on-year due to falling demand and stagnation.
- The speaker anticipates a tougher 2023 where home prices may wipe out gains from the previous two to three years, potentially falling further than the previous peak-to-trough decline but at a faster speed, while migration patterns to new cities are expected to persist.
- The outlook notes a significant undersupply of homes that may support the economy and expects future home prices to become more affordable, with the current market cycle anticipated to be less extreme than the housing crisis that bottomed in 2012.