Re/Max CEO, co-founder and chairman of the board Dave Liniger spoke with a small group of journalists Friday morning at Re/Max world headquarters in the Denver Tech Center.
He spoke about the launch of a new company, Motto Mortgage, the state of Denver’s housing market and what he’s learned from his journey back from a near-death experience.
Q: Are homes in Denver essentially becoming unaffordable?
A: “The demand and supply is out of whack. There’s just not enough homebuilding going on and without new homes being built a lot of people are afraid to move up and sell their existing house because if they get it sold, there’s nothing for them to move in to. In the lower-price area say under $400,000 or $500,000, the demand is so great and the supply is so low that it makes it difficult for people to get their foot in the door. It’s unfortunate. It will change over a period of time. The big thing that’s happened in Colorado is everybody wants to live here. We have more than 100 some-odd thousand people a year coming here, and we’re only building 20- to 22-thousand apartments and houses a year. Until the homebuilders can catch up on building and get us enough inventory the market’s going to stay tight.”
Q: Is there something builders could be doing to catch up?
A: “What ended up happening was that the apartment markets became very frothy. And they can make just as much money building a 100-unit apartment complex as they can building 40 or 50 single family houses. And as we lost a lot of our homebuilders do to the inability to get financing, they lost their workforce. Many of the people we lost from the workforce just gave up. If they are 50 or 55 or so, well, they were looking at retirement. Manual labor at age 65 being a carpenter is very hard work. And so we lost those people, and they weren’t replaced as apprentice tradesmen because we didn’t have enough business for them. What’s happened now though is the apartment markets are peaking, and so builders are saying, ‘well, that market’s going away.’ Builders build when they can borrow money, and so now they will borrow money to build single-family housing. And if we can get them building it at the lower price ranges, it will have a tremendous effect on the market.”
Q: When do you see the market normalizing?
A: “I used to think after 50 years in the business I could figure this thing out, and I can’t. It’s just I find it so unbelievable that 100 and some-odd thousand people are moving here every year. And that just keeps putting more and more pressure on the Front Range especially. So, I think we’re going to be a tight housing market for at least another 2 to 5 years.”
Q: One thing we hear a lot about is that Millennials don’t like buying homes. What trends do you find intriguing as you look at the landscape?
A: “The rumors on the Millennials not being buyers are changing very dramatically and very quickly. The average age of Millennial is about 33, and those 33-year-olds are making up about 39 percent of our buyers. So, we’re almost back up to the 40, 42-percent first-time buyers. Many of them couldn’t buy. They had lower-paying jobs, entry-level, out of college. Many of them were saddled with a lot of educational debt. And many of them quite frankly really weren’t interested in being a homeowner. There’s a certain amount of joy in being 25 or 30-years-old, living downtown, being near the bars and the hotspots and the sports and the theater. But the bloom on that rose kind of goes away once you end up deciding that you’re going to be married, and family formation, have a child or two. And also with the way prices have skyrocketed downtown, it’s now less-expensive to live in the suburbs. And so you’re starting to see the trend of Millennials forming families. And they are moving out of apartments. And they are moving out of their parents homes. And they are moving to the suburbs. Long term, they’re not going to be much different than any previous generation. They just put off their marriages about 5 to 7 years longer than the previous generation did. So, they pushed off the home buying 5 to 7 years longer.”
In January 2012, an undiagnosed staph infection in his back paralyzed Liniger from the neck down. His condition worsened, and while on life support he flat-lined and was revived by CPR. He spent months in a coma. When he came back he says he had the cognitive ability of a 5-year-old. He recovered at Craig Hospital and learned to walk again. He authored a book about his recovery called “My Next Step: An Extraordinary Journey of Healing and Hope.”
Q: Are you 100 percent yet?
A: “No. I’ll never get quite back 100 percent, and all the back surgeries and all that sort of thing. But fortunately, I’m out of my wheelchair most of the time. I walk with a cane. Is the glass half-full or is it half-empty? And for me, the last four years I’ve had have been an incredible gift. I found out who loved me. I found out that most my people were good people… The one thing you find out when you’re handicapped for a while is that most people are a lot better than you think they are. We’re in our cars and we get cut off and you flip the bird at somebody and you think they’re rude. I’ve never been treated that way as a handicapped person. Being in an electric wheelchair for almost two years, uh, nobody hesitated to help. Everybody opened the door. You just find out how good human beings are.”
Our partners at the Denver Business Journal have more on Motto Mortgage.