In the U.S. the supply of single family homes for those that want to own their own place has become tighter and tigher.
Many believe the main culprit is the pandemic, with less retirees selling and downsizing into a retirement place and the moratoriums keeping any and all foreclosure inventory off the market.
There is another factor though, and its been going on for about a decade already...
The boom on the real estate investor...
Let's be real here, ever since HGTV and such gained popularity with all the house flipping shows and what not, real estate investing has become popular and the cool thing to do.
The reality is single family homes is generally the lowest barrier to entry and with super low interest rates a lot of John and Jane Does can grab that second home to hold as an investment property.
For each and every time that happens, it is one less home for a primary homeowner to purchase. And so the snowball continues.
Very interesting dynamic in the overall market and supply side issue for sure.
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You're not to blame for taking advantage of a clear price signal in the market, though. The Federal Reserve is to blame for their manipulation of interest rates and the money supply.
Hahah, exactly! Was being a bit tongue and cheek but the boom in investing has had an impact on supply for homeowners, plus the fact that all they seem to build is Apartment bldgs now, atleast by me in FL.
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This is a great topic and one I'd like to learn more of. In Australia we have a housing crisis too however, we also have tax incentives for people to buy second properties.
You get $10,000 back annually of the costs in operating a rental property which includes claiming shortfall between rent and repayments. You also get depreciation back from the tax man.
How much are houses in the states?
In Australia many of the poor can not afford to pay rent with rent in Melbourne being $350 - $500 a week. The average house and land price in Australia to own is $886,000 costing many out.
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Yeah it's crazy over there! Reminds me of the States in 2007! I spent a month in Sydney back in 2014 and the prices were already crazy then! I'd love to live there actually but that housing bubble needs to burst first!
And taxes on investment property here are actually higher than on primary residence. Price swing depending on states. $2.4 million for a house in San Francisco, CA and then $80K for one in the middle of nowhere Missouri.
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Wow! A small country town for an old weather board run down near collapsing home will still cost $150k and that won't even get you water mains. Not even a natural gas connection.
$2.7m US is $AUS3.4m that's less than house prices in the city. Malvern a suburb just outside of the city is probably 5m and Toorak looking at 15m.
I just had a look at south Melbourne, dog boxes (small apartments are $1.5m a home is looking like $8m
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It is one small part of the total issue.
Here in CO, 10 years ago they but restrictions on Condo building so for over a decade you had no one building condos.
We also have a lot of protected land so it limits where you can build.
Regardless of "flippers" this limit on building new condo units has but us at a huge shortage of multi-family units and across the whole country a shortage of about 1 Million multi-family units.
Governments need to get out of housing.
Tiny Homes are banned in most states because the size of them falls under "slum lord" laws.
Flippers affected housing supply a little.
Air BnB affected housing supply a bit.
BUT you can't stop progress. Air BnB will never go away and people should be able to do what they want with their property.
Single Family homes vs condos vs Tiny Home communities needs to be looked at.
Basically Governments with policy are affecting the supply side far more than a few Air BnB investors.
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Yes, and gov't is slow and always several years behind the curve on regulation changes. Here in South FL, all they build is big apartment complexes, rarely do you see any single family communities being built.
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Interesting that in South FL has very few single family homes.
I wonder how much of this is a density city/rural concept.
In the 16 years I have been here it has gotten denser and denser and traffic thicker and thicker. Guess we are aiming for city mode.
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Do you own any properties in South Central Pennsylvania? My nephew is renting in the city of York with his family and looking to find a home to buy. If you think Baltimore is bad, the city of York makes Baltimore look like Beverly Hills in comparison!
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Holy crap! Noted, stay away from York. Own one with some partners about 30 minutes away from York but its a rental and is occupied.
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My niece and her boyfriend found a nice rental in West Manchester. My sister (niece's mother) and I helped them move in this past weekend.
There are many nice homes in the surrounding boroughs around the city, but the city itself is in need of some major urban renewal! Not to mention the amount of crime to include lots of shootings. My nephew's rental actually has bullet holes in the structure and it is too dangerous for the children to go out and play.
I grew up in the suburbs of South Jersey, so I am not really keen on city living. To each their own I guess. It would be nice if my nephew was able to find something better, mostly for his children's sake.
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Don't worry. More construction will follow on your dime soon.
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