Types of Housing
Home ownership is a big decision and, on an individual level, should be made after careful consideration of its effect on a person’s family, friends, and lifestyle. On a broader level, the housing market is affected by the supply of affordable homes and the amount of money people have for housing. Put simply, the market depends on the supply and demand for homes.
There are many things that affect the supply or demand of homes. On the supply side, the availability of credit affects how many homes builders can afford to build. The availability of land also plays a major role. If space is limited, it becomes difficult to keep adding homes to the market. Finally, another factor is zoning, which is governmental policy that determines what can be built where. For example, if a local government rezones a neighborhood that was previously designated for lots (a piece/parcel of land) of 20,000 square feet to allow lots of 6,000 square feet, then the number of housing units that can be built increases.
Demand is also influenced by many factors. First, demand for homes is driven partly by the amount of money that is available for housing. To clarify, it is not only the amount of income that residents have that matters, but the portion of all money that is available for housing. If the price of housing is high, it will offset some of the income people earn; that is, a greater portion of income needed for housing. Also, interest rates affect the amount of money that is available for housing because lower interest rates decrease the cost of borrowing--allowing more people to afford the same home. Examples of other demand factors include housing prices, rent prices, desirability of a neighborhood, commuting options, and proximity to job opportunities
Demand for homes generally can go up and down, as it can for different types of housing. The various types of housing all have unique characteristics.
Let’s look at some different types:
Single-family detached homes are most commonly associated with residential real estate. It is a structure that is situated on land owned by the same owner as of the structure.
Condominiums are individually owned units in a larger building or complex. Condominiums may include detached homes that share a larger complex with communal facilities, such as a pool or clubhouse. They also have general rules that govern the use of the units and how the complex is managed. These general rules are known as Covenants, Conditions and Restrictions (CC&R).
Single-family attached homes differ from condominiums since there are usually no association dues. Association dues exist to cover common expenses for communally owned areas, structures, and services. As the name suggests they are attached to other units, sharing a common wall.
A housing cooperative (co-op) is a corporation that owns the real estate and buildings. It is the corporation then sells shares to members who are given the right to live in one of the units. An interesting difference between housing cooperatives and condominiums is that cooperatives select their members through a screening process.
Boats and floating homes may or may not have a motor and can be moored permanently to a dock. Also, some will float permanently, and others will only float when the water level rises.
Manufactured and modular homes are slightly different from one another. Both are prefabricated, meaning large portions (if not all) of the structure are built away from the property in a factory. They are then either transported whole or assembled on site. The difference between them is that manufactured homes have a permanent chassis, allowing the house to be moved as a whole.
Multi-family homes are a general category that refers to when multiple residents live in a single building. This includes condominiums and cooperatives.
Mixed-use homes have retail space below and apartments or condominiums above, signifying the “mixed-use”.
Public housing includes property owned by the government. Public housing is meant to provide affordable rentals to eligible families and individuals.
Military housing is a government-owned property designated for use by those serving in the military.
With so many types of housing available, brokers will often choose to focus on a few rather than all types of homes. For example, floating homes (houseboats) require special maintenance and inspection prior to purchase. Therefore, some brokers might choose not to sell houseboats because of the time required to learn all of the protocols.
Let me know if I can help you choose the best housing type for you!
Marina Zaric, Your Real Estate Pro