Have you noticed that homes are in short supply even though we are in the midst of a pandemic?
JVM Lending published a great blog on the single-family home shortage last week. In the article he named the following as top reasons for low inventory:
- Sellers are reluctant to list during the pandemic,
- Demand is surging due to low mortgage rates,
- New construction in California is woefully lagging,
- Shifts in demographics – people are staying in their homes longer.
The Homebuying Gorillas
An additional reason touched on in the article for low inventory is the addition of Wall St. Money to the home purchase market place. Just this week, the largest home owner in America announced that they had raised another $1 Billion (with a B) to buy homes in suburban neighborhoods.
GlobeSt.com is forecasting that demand for single-family rental market will continue to grow.
What is the Local Impact?
Doing an address search for the mailing address of Invitation Homes provided approximately 350 homes owned by the company in Contra Costa County.
Tricon American Homes, the second largest home rental company, appears to own over 230 homes in Contra Costa County.
Combined this is nearly 600 homes that we should not expect to sell anytime in the near future as the investment model of these two companies is for long-term cash flow.
What’s the conclusion we can draw from this? Housing inventory remains extremely low despite high demand and low interest rates.
Sellers can expect a properly price property to sell quickly.
Buyers should realize that the market is competitive and they should write a very strong offer.
If you are thinking of selling, now is a great time to capture equity and position yourself in cash for the next purchase. I would love to discuss this option with you.
Real Estate Broker