Real Talk: Next Big Thing For First-Time Buyers

Well, hello everybody, Stephen Meade with Domicile Real Estate real estate for people who love houses where we are on a mission to help California's renters become homeowners. Anyhow, this is Real Talk where I basically just get to rant about whatever I feel like for five or 10 minutes or so. And you get to listen, actually, you don't have to listen. But I think you might actually enjoy this one. And this is about something that's really good news. And I'm gonna frame this, we've heard a lot about the tiny house movement, but it hasn't really caught on.

And there's actually a lot of reasons for that, which we're not gonna entirely go into. But there is something else that is actually making a comeback. And I think it might be a solution, especially here in Southern California. And I'm pretty excited about it. So and that is something that we're calling micro units. Now most cities have a rule against building things that are smaller than four or 500 square feet, for people to live in, it is simply not not allowed. And what's interesting about that is that these type of micro units are not actually a new concept. Earlier in the 20th century, these are actually called residential hotels, because sometimes they offer the CO living arrangement, right where you might have a room and a private bath.

But there would be kind of like a shared cooking space, for example. And what we're seeing is as housing and density are impacted, I look at this as actually being something that could be more successful than tiny houses. And there's a bunch of reasons that I'm excited about it. Number one, I think this is a solution for urban areas, I don't think turning empty parking lots into tiny homes at scale is going to work in urban areas, I think we actually need more density than that, I think that might be a viable option, especially for transitory homeless housing, I think that could be but I think for for normal people who are not experiencing housing issues other than that housing is just really expensive. I think those people, we're going to need something that's a little bit higher density, higher service.

And so, you know, what we're seeing are these ideas of these sort of tiny houses, but built into a building where you can bundle it with extra services. So where I live in the city of Long Beach, and where we are based out of developed a couple years ago, a micro unit pilot program that allowed for the creation of up to 500 Micro units as a bit of kind of an experiment to see. And we actually have a bunch of these projects, which are in various stages of development, a couple of which are actually under construction. Now for now, these units are strictly for rent, right? I think a lot of these developers are looking at these as a bit of an experiment, but not sure how to configure them what's going to work do we need small kitchens, we not need small kitchens. But a lot of these units are in that 250 to 400 square foot range, or in a what would be considered a medium to large hotel room.

But I think in an urban setting, especially in a place like Southern California, where you have really access to generally great weather, people are outside a lot. They're out in the streets, there's a lot of public spaces that are available in these urban settings, coffee shops, things like that. I think these kind of micro units, the real value in these is going to be when a developer takes a risk on making these as for sale housing. One of the common themes that we talked about here is that there is no bottom rung on the property ladder. Most of our first time buyers that we see, have actually reached their mid 30s. There's not really a housing product that is designed for younger, oftentimes single but not always, urban dwellers who might not have as much of a need for a space, but they'd really like to get into something they'd like to actually start on that homeownership journey.

And right now, there's not really a lot of products and things out there for them. By making these micro units number one you make you make it so developers can frankly, put a lot more units in the same size building in the same size footprint. So this can greatly reduce the costs of these units and create kind of a lower starting point and a lower entry point. Also, I'm a big fan of clever design. I like when architects and designers and really there are some very talented people here in Southern California are given a challenge or constraint. And I think we're seeing things like ideas of multi use spaces, right, like, for example, built in sofas that can convert into beds and some of these spaces so I think we're seeing some a lot of creativity and things things we saw in the tiny house movement, but now this is a really a much more practical iteration.

So I'm excited. I think this is something that might actually catch on. If you're interested in this. We've got some links down below in the video. I At some of the projects that are actually coming up here in Long Beach, I think we're going to see a return to these, these sort of micro units under 400 square feet that are rentable, and hopefully also some for sale units that appear so that people can kind of start that homeownership journey a little bit earlier when they're in their 20s and not having to wait to save so much money. Obviously, if the price is lower, that also means the down payments are correspondingly lower as well. Anyhow, thanks for watching. That's my rant this week. Steven Mead here for domicile real estate where we are on a mission to help California's renters become homeowners. If you or someone you know should be a homeowner, we would absolutely love to chat with them. Don't forget to like subscribe and hit that notification bell and we will see you again real soon.