From Quartz:
‘Fractional home ownership’ wants to fix real estate’s woes. What is it and could it work?
There’s more than one way to own a house these days.
Sites including real estate startup Pacaso are opening up a new market for people looking to own just a fraction of a house — for a fraction of its total price. Instead of laying claim to an entire single-family home, Pacaso sells luxury single-family homes to groups of buyers, a practice known as fractional home ownership. Someone could, for example, own one-eighth of a multi-million dollar mansion in Florida’s coveted Marco Island for just $736,000.
“There is a pressing issue: an affordable housing crisis,” Austin Allison, Pacaso’s CEO and co-founder, said in an emailed statement. The effect of fractional home ownership models like Pacaso’s is two-pronged, he said: They create additional inventory and optimize the use of existing housing to help keep up with demand and improve affordability, he said.
…
While Pacaso, which was founded in 2020, says it helps ease the affordability burden and supply constraints, it remains a niche part of the real estate market, Bankrate analyst Jeff Ostrowski said. And while it does address supply, he said, the effects are felt more in discretionary markets given that most of its listings are luxury properties.
“The real housing shortage problem is not a shortage of beachfront vacation homes,” Ostrowski said. “It’s a shortage of three-bedroom, two-bathroom homes, near schools and jobs that families can live in.”
Co-buying itself isn’t new: 62% of home buyers said they purchased and share ownership of their home with at least one other person, according to a 2023 report by real estate listing platform Zillow. But the fractional home ownership model as it exists today is aimed at wealthier individuals who are looking for a second home, Ostrowski said, rather than first-time buyers or those who are looking for their primary residence.
“I think this is pretty clearly targeted to the upper-middle class folks,” he said. “People who have enough wealth that they can own their primary home and they can consider buying a second home, but either don’t want to or don’t have the cash to go out and spend $1 million or $2 million on a second home.”
Other models of fractional homeownership have also cropped up allowing investors to own a share of homes much like retail investors can own shares of companies. Sites like Jeff Bezos-backed Arrived, and Fundrise, which received $770 million in financing from JPMorgan Chase, allow people to directly invest in residential real estate.
…
Kurt Carlton, president and co-founder of the real estate investment marketplace New Western, said these ventures are a net positive for the housing market. With 15.1 million vacant homes in the U.S., accounting for 10.5% of all housing inventory, there is a demonstrated need for innovative models to shore up investment in the sector, particularly when it comes to single-family residential units, he said.
For Carlton, anything that encourages investment in the single-family market is good — but it may not be the future of real estate investing just yet, given that their market share is still small. Instead, he sees the “real winner” as local independent real estate investors who are buying in neighborhoods they know and understand.
“They’re not nonprofits, but they’re completely aligned with the needs of the community in terms of they’re finding vacant inventory, returning it to market, and giving the builders a run for their money right now as well,” Carlton said. “And that’s what we need. We need supply.”
First
Fractional home ownership: I’ll sell you my detached garage for 250K. I’ll throw in the five gallon, Home Depot orange bucket for your potty use, just don’t dare empty it on the property.
For Carlton, anything that encourages investment in the single-family market is good — but it may not be the future of real estate investing just yet, given that their market share is still small. Instead, he sees the “real winner” as local independent real estate investors who are buying in neighborhoods they know and understand.
This guy previously sold Beanie Babies and collector plates from the Bradford Exchange.
A guy I knew in college became a manufacturers rep in the toy industry. He had the Beanie Baby line. Made a fortune.
UPDATED FRI, MAY 10 20247:23 AM EDT
Stock futures rises as Dow pushes for an 8-day winning streak: Live updates
Pia Singh
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“What’s important in all of this context is, ‘are we in the early stages of a long-term bull market or not?’” Chris Hyzy, chief investment officer of Merrill and Bank of America Private Bank. “It feels comfortable saying it on a day like this, but we are, in our opinion.”
The kids in Portland were all doing it. My little sister wanted to buy a home a few years back with 2 other people. I had to talk her out of it. She’s not even on speaking terms with them anymore…but she wanted to sign a 30 year mortgage.
It’s just stupid. Period.
She wants to buy in NJ now…it’s a pipe dream given her situation….but I had to talk sense into her that a condo should be her target. She was more thinking 3 bedrooms for her non-existent kids and husband.
I have a closet for sale, ten grand. If you can sleep standing up, it’s a bargain.
It was a pain getting roommates to pay their share of utilities. Monday would I want to lock in a 30 year mortgage with anyone other than a spouse.
Monday is no way.
Hold my beer says:
May 10, 2024 at 8:54 am
It was a pain getting roommates to pay their share of utilities. Monday would I want to lock in a 30 year mortgage with anyone other than a spouse.
Ever had a spouse make a false allegation and have you thrown out of your house by the PoPo and a judge?
F’n rethink that. Don’t ever tell your son’s that.
Buy your own damn place. Oh, and if you don’t think it happens to someone every 5 minutes in America, you are wrong, bucko.
TheretherePhoenix
Hold, there is a solution to that as well. Individual circuits with multiple meters in the home! Common areas? Come on bro! It’s the digital age. Make the stove electric and everyone has to enter in their own pin #. I hear China already has the technology to monitor how much toilet paper you use in a public restroom.
BRT,
China needs to catch up with Japan and make a Toto like seat
No paper, all water. Heated.
We all need to catch up to Japan on a number of things
“Death by Karen.” Rip dude. Lawyer calls it out.
https://youtu.be/JykpgYNHW28?t=491
BRT says:
May 10, 2024 at 9:23 am
We all need to catch up to Japan on a number of things.
Three words.
AINT GONNA HAPPEN. Americans don’t have the stones, the work ethic, or the integrity. They are liars starting at birth. Just ask the “American” Indians if they should be trusted. Ask the N. Koreans ( America reneged on a deal with them and put nukes on their border in the 50’s.)
The list goes on and on. Americans and the ilk they sleep with are never to be trusted.
I was under the impression that townships were doing everything they could to discourage this kind of thing. They wouldn’t get another property tax bill and risk having another family with kids enter the school system.
Libturd, do the water levels in lake mead concern you at all? Last I was there it was really low…and they keep building.
9:34 from that comment then i’d surmise you are not an American.
Proud Indian? disenfranchise HispAnic? Or some other worthless culture that washed up on these shores?
Well?
BRT: Japan needs to increase their birth rate.
BRT–Condo, what could go wrong…
Socialism ruined the boomer generation. They got themselves cheap housing, free college, and after 65 they get socialist universal income, and socialist universal healthcare.
And they vote policies to destroy the future of younger generations.
Phoenix says:
May 10, 2024 at 9:34 am
BRT says:
May 10, 2024 at 9:23 am
We all need to catch up to Japan on a number of things.
Three words.
AINT GONNA HAPPEN. Americans don’t have the stones, the work ethic, or the integrity. They are liars starting at birth. Just ask the “American” Indians if they should be trusted. Ask the N. Koreans ( America reneged on a deal with them and put nukes on their border in the 50’s.)
The list goes on and on. Americans and the ilk they sleep with are never to be trusted.
“Proud Indian? disenfranchise HispAnic? Or some other worthless culture that washed up on these shores?”
Oh, Snap!
Actually they just voted more and more things to fatten their bellies.
The younger generations were not and are not in their thoughts at all unless the pesky little critters go after the gifts they showered on themselves.
Very Stable Genius says:
May 10, 2024 at 10:34 am
Socialism ruined the boomer generation. They got themselves cheap housing, free college, and after 65 they get socialist universal income, and socialist universal healthcare.
And they vote policies to destroy the future of younger generations.
D,
Originally it was a concern. I did some research on it and the issue is desert farming. It’s completely unnecessary and if push comes to shove, they will make the farmers shut down. Vegas itself uses very little water. They recycle close to 99% of the water they use. On top of that, the last two winters have put a lot of water back into the lake. Ultimately, their is a pact between three states that needs to be worked out and is very close. Nevada has managed to meet their end of the bargain, but the other states have not. Lake Meade is a much smaller concern than it appears. Plus, there is always Lake Tahoe to tap. It’s the deepest lake in the country and huge. Running a pipe or canal between the two would not be terribly difficult if it were not for the tree huggers.
Japan needs to increase their birth rate.
My passport is ready, when do we leave?
Lib,
To each and their own, but I have no idea why you would willingly live in a desert. It does have good food and entertainment.
Love their society…classy.
BRT says:
May 10, 2024 at 9:23 am
We all need to catch up to Japan on a number of things
Driving from Phoenix to Tucsan, I saw all those farms in the middle of the desert. That’s gotta stop. Apparently it’s Saudi owned. One has to question why the Saudi’s, who have unlimited desert land chose to farm in Arizona.
Phoenix
Did you ex keep her head still when she talked?
https://www.dailymail.co.uk/sciencetech/article-13399637/How-spot-psychopath-woman.html
BRT,
Because they don’t have water. :P
It’s true, but neither does Arizona…at least with them using it all up. We really need to be setting up pipelines for water. It would be a great infrastructure project and encourage all kinds of sustainable economic growth.
Killing the Vegas Pipeline
https://www.hcn.org/issues/52-10/south-water-killing-the-vegas-pipeline/#:~:text=Nevadans%20called%20it%20the%20Las,victory%3A%20The%20project%20was%20terminated.
I see this idea kicked around occasionally
https://www.rgj.com/story/news/2018/03/07/las-vegas-considering-pacific-coast-desalination-plant-future/404867002/
It’s not that hard to solve. Unfortunately, we are at a stage where our governments are completely non-functional, so it won’t happen.
The Great Pumpkin says:
May 10, 2024 at 12:08 pm
“Love their society…classy.”
BRT says: “We all need to catch up to Japan on a number of things”
Went to lunch at the 4 Seasons or Palace Hotel on/near the Imperial Palace grounds in Tokyo twenty-odd years ago, and it was like stepping back in time to 1958. The hotel restaurant itself was a sleek mid-century modern design, wait staff in crisp uniforms, every man wearing a suit, every woman in a stylish dress, and everyone smoking.
Yep, Boomers are non-stop freebies for themselves. And the first ones to cry any increase to minimum wage. Meanwhile the young have $250k in college debt, $1m mortgage for a starter home and lowest minimum wage of all rich countries.
Phoenix says:
May 10, 2024 at 11:08 am
Actually they just voted more and more things to fatten their bellies.
The younger generations were not and are not in their thoughts at all unless the pesky little critters go after the gifts they showered on themselves.
Very Stable Genius says:
May 10, 2024 at 10:34 am
Socialism ruined the boomer generation. They got themselves cheap housing, free college, and after 65 they get socialist universal income, and socialist universal healthcare.
And they vote policies to destroy the future of younger generations.
Low tax rate, water 6 dollars per gallon. Take short showers folks.
D-FENS says:
May 10, 2024 at 12:38 pm
I see this idea kicked around occasionally
https://www.rgj.com/story/news/2018/03/07/las-vegas-considering-pacific-coast-desalination-plant-future/404867002/
Meanwhile the young have $250k in college debt, $1m mortgage for a starter home and lowest minimum wage of all rich countries.
You forgot $15k in property taxes
I HAVEN’T SEEN 15k SINCE BEFORE THE OBAMA YEARS!
Ruh Roh.
Deputies responding to a disturbance call at a Florida apartment complex burst into the wrong unit and fatally shot a Black U.S. Air Force airman who was home alone.
All started with a “Karen Call.”
We have a G-4 Solar Flare. One below the lights go out.
https://www.nytimes.com/2024/05/10/science/solar-storm-earth.html
“This guy previously sold Beanie Babies and collector plates from the Bradford Exchange.”
He’ll be selling Donnies NFTs next.
So are the wingnuts in here carpooling down to Wildwood tomorrow?